site.btaConsumer Association Says an Increasing Number of People Are Unable to Pay up Their Debts, Calls for Voluntary Debt Arrangements

November 30 (BTA) - The Association for Consumer Protection warns that an increasing number of people are unable to pay up their debts and urges the legislature to make possible voluntary debt arrangements for debtors. They cite central bank statistics showing that unserviced debts now total close to 6 billion leva and some 2 billion of those are outstanding household debts.

Considering the impending failure of the winter tourist season and the COVID-related restrictions on businesses imposed for the period from November 27 to December 21, the share of people experiencing difficulties in servicing their debts will rise even further, the Association says.

They expect the increase to make itself felt in February as the effects of the weak tourist season become full-blown.

The situation will be worsened by the sure increase in the number of unemployed people, they say.

National Social Insurance Institute statistics shows that close to 294,000 people lost their job between March and November while the new hires were just over 184,000.

The Association goes on to urge legislators to reconsider their position and allow voluntary debt arragements for debtors. It should apply for debts for which a writ of exection has not yet been issued and will protect thousands of consumers from being sued, often without their knowledge, and having their accounts, wages and pensions distrained.

Borrowers and debtors got a moratorium during the first coronavirus lockdown in the spring of 2020 when they were able to delay loans and debts for up to six months without penalty. In early summer the morastorium was extended until September 30, meaning that loans could be rescheduled until March 31, 2021.

Borrowers no longer have this option during the current "soft lockdown".

The Association points out that debt collectors were among the few businesses left outside the reach of the emergency legislation when all others - banks, enforcement agents and even fast loan companies - were ordered to freeze operations and debtors were given a 6-month grace period on their debts. RI/LN/
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