Implementation of Estonian Debt Protection Act needs better explanation
Estonian Debt Restructuring and Debt Protection Act came info forceon April 5, 2011. The purpose of the Act is to is to give possibilities to the debtor who is a natural person with solvency problems to restructure his debts to overcome his solvency problems and avoid bankruptcy proceedings. The legitimate interests of the debtor and creditor are taken into account during the restructuring proceedings.
According to the analysis of the Estonian Debt Counseling Association the Act has not had much use in regulating the debts since in most cases the applicant is insolvent. The discussion in the Estonian Parliament’s legal commission last week concluded that the Act can be implemented in the cases where the debtor has some means and possibilities to take part in the process. In the cases where there is no prespective to use the Debt Restructuring Act , it is best to use the bankruptcy proceedings.
Estonian member of the Parliament and the head of the Parliament’s legal commission Marko Pomerants remarked that the Act is targeted to the persons who have the will and means to solve their problems related to debts outside the bankruptcy proceedings. The discussion in the commission brought out a positive side of the Act – credit institutions try more to come to an agreement with the debtor in order to avoid the debt restructuring proceedings. He also commented that it is important to enforce provisions in the legislation that would give the debtor an overview of his possibilities to overcome his debts before the debt execution proceedings begin.