NEWS

Bank customer?s debt forgiven

In what could turn out to be a significant ruling for Greeks suffering from the economic crisis, a court in Hania, Crete, has become the first in the country to order that the majority of the debt owed to banks by someone still in full employment be wiped out.

Sunday?s Kathimerini understands that the Justice of the Peace Court in Hania based its decision on a 2010 law that allows judges to give protection to people struggling to meet their financial commitments. Until now, the legislation has only been used to give debt relief to unemployed people or those with no substantial income.

However, in the Hania case, the court ruled in favor of a full-time civil servant. The divorced woman, who has three children, asked to be given protection after her banks refused to offer her new terms for combined loans of 112,000 euros. The unnamed woman explained that she did not have any assets she could sell to pay off her debt.

In its ruling, the court deemed that the woman, who has moved in with her parents, needs 350 euros a month to cover her own costs but that the rest of her earnings could be distributed equally among the three banks she owes money to. The judge deemed that this process should last for four years, meaning the woman would pay back some 30,000 euros and the remaining 82,000 would be written off.

Thousands of people have already appealed to the courts for protection under the 2010 law but legal experts believe the decision in Hania may lead to a new wave of appeals by Greeks who still have jobs but are unable to repay their loans.

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