Bankrupcty Regime For Private Individuals

The Hungarian Parliament has adopted a new legal regime setting out debt settlement procedures for private individuals.  The act will enter into force on 1 September 2015, and will have a huge impact on the business of banks and financial undertakings in Hungary.

The new regime is mainly aimed at non-performing housing loans; however, it does not exclude any kind of debt that is owed by a private individual who is a Hungarian tax resident.  The private individual debtor may initiate the debt settlement procedure under the following conditions: (i) the aggregate amount of the debtor's outstanding debts exceeds HUF 2 million (approx EUR 6,600), but does not exceed HUF 60 million (approx EUR 200,000), (ii) the debts exceed the value of the debtor's assets (including the aggregate income expected in the upcoming 5 years), but do not exceed double the value thereof, (iii) at least 80% of the debts are acknowledged or undisputed by the debtor, (iv) at least one debt is