Debt settlements to banks, state at €2.65 bln

A total of €2.65 billion in private debt to banks – or, more accurately, to the recovery funds that bought delinquent loans from banks – and the state has been settled so far this year outside the courts, through 7,257 cases, the Ministry of Finance announced.

Of those, 931 settlements worth €400 million were made in July alone, the ministry added.

Also in July there were 3,277 new applications for settlement.

There are a total of 18,880 applications on which approval is pending. Most of the pending applications involve debts ranging from €50,000 to €200,000, but most of the sums involved (59%) come from cases where debt exceeds €1 million.

Debts to banks and recovery funds were slashed about 26% on average, while the agreed “haircut” on the debts ranged from 8% to over 50%, data show.

The average forgiven debt to the state was 18% and total forgiven debt was €782.92 million.

While, on the creditors’ part, about 23.8% of applications were rejected, 36% of the debtors rejected creditors’ debt repayment proposals; only a little more than half gave a reason, saying they were unable to meet the payment schedules.