Over-indebtedness and the Business Crisis Code

THE NEWS INTRODUCED BY LAW N. 176/2020

The changes introduced represent real help against the economic crisis for families, consumers and small entrepreneurs, hit hard (also) by the negative effects due to the pandemic emergency, as they will allow certain categories of people and entrepreneurs to be able to free themselves from debt in a simplified way.

First of all, the art. 4 ter of the aforementioned law, provides for the simplification of access procedures for businesses and consumers, also applicable to procedures pending on the date of entry into force of the same law no. 176/2020.

The notion of consumer is expanded to include not only the natural person who acts for purposes unrelated to any entrepreneurial, commercial, artisan or professional activity carried out but also any member of an LLC, an S.a.s and an LLC, for debts unrelated to corporate ones.

And again, the art. has been modified. 7 of law no. 3/2012, in the part in which it provides for further circumstances due to which the over-indebted debtor cannot formulate the proposal, and in particular:

• if he has already benefited from the debt discharge twice;
• if, limited to the consumer's plan, he has caused the situation of over-indebtedness with gross negligence, bad faith or fraud;
• if, limited to the crisis settlement agreement, he appears to have committed acts aimed at defrauding the reasons of the creditors.

It has also been expressly provided that the minor composition also produces its effects towards the partners with unlimited liability.

A further novelty is the introduction of the "family procedures" regulation which provides for the possibility for members of the same family to present a single procedure for the settlement of the over-indebtedness crisis, when they are cohabiting or when the over-indebtedness has a common origin.

They fall within the category of "members of the same family" in addition to the spouse, relatives within the fourth degree and relatives within the second degree, as well as the parties to a civil union and de facto cohabitants referred to in law 20 May 2016, n. 76.

In any case, the active and passive masses remain distinct.

DISDEBITATION OF THE INCAPACITY DEBTOR

A very important innovation is the inclusion of article 14 quaterdecies, relating to the incompetent debtor.

The new procedure, governed by art. 14 quaterdecies, L. n. 3/2012, allows the debtor, a deserving natural person, who is not able to offer creditors any direct or indirect benefit, not even in the future, to access debt relief only once, without prejudice to the obligation to pay the debt within four years from the judge's decree in the event that significant benefits arise that allow creditors to be satisfied in an amount of no less than 10 percent.

The effect debt relief operates as a true benefit of an exceptional one-off nature, directly linked to the existence of two conditions:

• debtor as a deserving natural person, where "deservingness" must be understood as the absence, on the part of the interested party, of fraudulent acts and the total extraneous nature of the subjective element of fraud or gross negligence in the formation of the indebtedness;
• absence of assets to be liquidated.

This initial benefit for the debtor debtor could be canceled in the event of the production of new wealth in the first four years, with the effect of making the so-called debt relief more convenient. common.