The new regulation for debts owed to Municipalities and Municipal Legal Entities offers a significant opportunity for debt settlement, applying to debts that have been certified up until October 31, 2024. Debtors can pay off their debts in up to 60 monthly installments, with a minimum installment amount of €50. Additionally, for vulnerable debtors, the regulation provides a "haircut" on surcharges and fines, ranging from 75% to 95%, depending on the method of payment.
The total amount of debts that can be settled is approximately €3.6 billion, covering various types of debts owed to Municipalities and Municipal Water Utilities.
The settlement scheme provides incentives for lump-sum payments or installment plans, with the following reduction rates on surcharges and fines:
- 95% for lump-sum payment,
- 85% for payment in 2 to 6 installments,
- 80% for payment in 7 to 12 installments,
- 75% for payment in 13 to 60 installments.
The scheme also applies to debts under suspension or those that have been included in previous arrangements. For debts under judicial dispute, inclusion in the settlement requires the debtor to withdraw any legal remedies.
The settlement becomes effective upon a decision by the head of the municipality’s financial service, and payment must be made within 3 business days. If delayed, a 5% surcharge will be applied for each month of delay. Furthermore, debtors who settle their remaining installments in one lump sum will be eligible for a reduction on the remaining surcharges and fines, corresponding to the number of installments in the revised payment plan.
