Lawmakers approved the reduction of interest on arrears
Lawmakers approved the reduction of interest on arrears
MPs from all parliamentary groups supported the first reading of the proposal reformist bloc to reduce the statutory default interest.
Now legitimate interest is determined by the Cabinet and is equal to the base interest rate (BIR) plus 10 percentage points. The proposal of the reformers is when the obligation is a merchant rate is base rate plus 8 percentage points, and if the debtor is an individual, the allowance is 4 percentage points.
Radan Kanev DSB explained that the default interest can not be punishment but compensation for the creditor. According to him, the proposal is too small reduction given the market conditions now that the price of money is almost zero. According to him, the state should not punish people because of financial difficulties have delayed payment to her.
Cetin Kazak from the DPS recalled that the high value of the default interest fixed 20 years ago in order to protect the interests of creditors, because at that time inflation was high, and the national currency was not so stable.
He suggested between first and second reading to prepare texts to settle pending cases.
A total of 110 MPs voted "for", 18 abstained and only two opposed.
Attorney at law Iuila Danova
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Email: iulia.danova@abv.bg