OVER-INDEBTEDNESS



Prevention and Treatment of Over-Indebtedness

Prevention and Treatment of Over-Indebtedness

Introduction

Credit plays a necessary and central role to the economic activity of our civilization, with clear advantages for the welfare of the citizens and the development of a society. But financial excesses and deviations and excessive debt developed during recent years have ended up causing the collapse of the financial system, which has led to a crisis and global recession of unknown dimensions and peculiar connotations and impact especially severe in the world. Thousands of families are in a situation of serious economic and financial difficulties, which raised the first order of importance and concern that must exist before the "hypertrophy of credit" and addressing the problem of over indebtedness in our country, which is materialize over the main concern and need for social, economic, legal and existing policy today.

This paper discusses the over indebtedness and its different approaches. The prevention and treatments of over indebtedness is also highlighted in this paper.

Over-Indebtedness

Regarding consumers, the term indebtedness is used, first, to refer to the situation where the consumer has too much debt but is still serving normally, or situation that the consumer, even without debt, has committed almost completely income for expenses, or a situation that mixes both. We still find ourselves, therefore, within the scope of normal compliances, i.e. outside insolvency proceedings. A different matter is that in such situations, there is a serious risk that, either by events unforeseeable and materially adverse (passive indebtedness), or by improper or negligent behavior of consumers (asset overhang), is completed incurring an unfit general to pay, that is, go to the area of ??abnormality in compliance, with the consequent need for the implementation of bankruptcy proceedings. Since in such cases there is still no general inability to pay, the term indebtedness is not a problem. But it should be noted that the economic situations that have been described, and the risk of incurring that involve inability to pay, do not present any peculiarity by the fact that the debtor is a consumer, being able to give exactly the same when it is not.

Second, the term indebtedness is also used in relation to consumers to refer to the situation where there is general inability to pay, to be treated by a collective. In these cases the indebtedness term refers to the same factual situation, with the name insolvency budget target is set to insolvency proceedings, which seems pointless. This was done in Proposition 122/000295 Law on the prevention and treatment of over-indebtedness of consumers, April 30, 2003.

Background

The legal treatment of over-indebtedness was set up at the end of 1989 Neiertz by law. It was reviewed for the first time in 1995 and a second redevelopment was made ??in 1998 under the Law on the fight against exclusion. The debt which had been originally analyzed as a temporary phenomenon - related to an indiscriminate use of credit (Indebtedness "active") - has perpetuated and the number of deposits of records has increased steadily year by ...