Debt Write Off for Some Swiss Franc Loan Debtors

Total Croatia News

Croatia Osiguranje insurance company will write off 30 percent of the principal and default interest.

Although it seems that the problems with loans in the Swiss franc are history, given that all such loans were converted to the euro a few years ago, new issues appear all the time. The latest case concerns about 1,500 debtors whose bank loans have been cancelled due to non-payment and the insured debt was paid instead by the Croatia Osiguranje insurance company, while thus became a creditor, reports Večernji List on 29 July 2017.

These loans have not been converted into the euro, but the insurer has now agreed on a settlement with the Franak Association, which represents people who took out loans in the Swiss franc.

The estimated debt of these debtors amounts to about 100 million kunas. Franak and Croatia Osiguranje have prepared two repayment models, which both include a write-off of 30 percent of the principal and all procedural costs. For those who opt for a one-off repayment of the outstanding principal, the write-off will include the default interest, while those who decide to repay the debt in the next four years while having 30 percent of the default interest written off.

“The settlement proposals have been sent to about 1,500 debtors in June and July, and they can send their replies by 30 September,” says Croatia Osiguranje, adding that they have demonstrated to be a responsible company which shows understanding for trying circumstances in which debtors live.

The negotiations lasted for several months, during which priority was given to finding a repayment model for those debtors who cannot repay their debt at once.

“If someone does not agree with the settlement, they should try to talk with the insurance company themselves and find a different repayment model, because individual arrangements are possible,” says Goran Aleksić, a Member of Parliament and one of Franak’s negotiators.

Franak praised the approach of the insurance company and its willingness to find a solution for debtors, most of whom have frozen bank accounts. They have also called on other entities which have bought Swiss franc loans from banks to follow this example.

Still, Aleksić notes that debtors have an option of suing banks due to overpaid interest, in particular, because no conversion has been made. Another verdict has recently been announced which shows that the statute of limitation has not yet passed – the Osijek County Court upheld the first-instance decision in private proceedings initiated by a debtor on the basis of a collective ruling in the Franak case. According to the verdict, the new date from which the statute of limitation is calculated from is 13 June 2014.

Translated from Večernji List.


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