The Ministry of Finance has submitted two bills to Parliament aimed at reforming the framework governing foreclosures, introducing new mechanisms for dispute resolution and additional safeguards for borrowers.
Binding role for Financial Ombudsman
The first bill, amending the law on the establishment and operation of the Unified Body for the Out-of-Court Settlement of Financial Disputes, strengthens the role of the Financial Ombudsman.
It provides that the Ombudsman’s decisions will be binding in disputes involving financial charges, interest rates and similar issues, for amounts up to €20,000.
Option to обратиться insolvency advisor
Under the same proposal, if an eligible debtor seeks verification of their debt through the Financial Ombudsman but no agreement is reached on restructuring or repayment, they will have the option to обратиться to an Insolvency Advisor.
This provision aims to offer an additional pathway for resolving disputes outside the courts.
More time for negotiated solutions
The second bill, amending the law on the transfer and mortgaging of immovable property, introduces changes to foreclosure procedures by extending the time available for reaching a settlement.
Specifically, the process will now begin from the earlier “Letter I” stage, rather than “Letter IA” as currently applied, effectively giving both the Financial Ombudsman and the debtor more time to find a solution before foreclosure progresses.
Focus on early intervention
The proposed changes are designed to facilitate earlier intervention in disputes and increase the likelihood of negotiated outcomes, while strengthening the institutional role of the Financial Ombudsman. The bills are expected to be examined by Parliament in the coming period.