Debt-for-Asset Settlement Stays Unchanged: Constitutional Court Rejects Banks’ Challenge Again

The Constitutional Court has rejected, almost in full, the challenge brought by nine banks and debt-recovery institutions against the mechanism that lets a debtor hand over their home to the creditor to be released, once and for all, from a mortgage debt. Decision no. 807/2025, published in the Official Gazette of Romania almost eight months after it was delivered, confirms that the provisions of Law no. 77/2016 on debt-for-asset settlement (darea în plată), as supplemented by Law no. 52/2020, remain constitutional, including the thresholds that let a debtor trigger the procedure without a court having to check, case by case, whether their situation truly amounts to unforeseeability. The case is directly linked to another topic already covered on this site, the deadlines debtors have when their assets are seized through forced enforcement, since both concern the balance between protecting the debtor and the creditor’s right to recover its money.

Law no. 77/2016 introduced, from the moment it was adopted, a mechanism that lets a debtor in difficulty transfer ownership of the mortgaged home to the bank and, in exchange, be released from all remaining obligations under the credit agreement. Law no. 52/2020 supplemented this mechanism with two cases in which “unforeseeability” (an unforeseen and serious change in the contract’s conditions) is automatically presumed, without the debtor having to prove it in court: when the exchange rate has risen by more than 52.6% compared to the moment the loan was signed, or when the monthly instalment has increased by more than 50% because of a rise in the variable interest rate, both situations having to persist for at least 6 months before the debt-for-asset notice is sent.

Nine banks and debt-recovery companies, among them Credit Europe Bank, Eurobank, Exim Banca Românească, Banca Transilvania and Alpha Bank România, challenged these thresholds in dozens of cases pending before courts across the country, later joined into a single case before the Constitutional Court. Their arguments targeted both the procedure by which Law no. 52/2020 was adopted (the lack of a proper impact study, the absence of an opinion from the National Bank of Romania) and its substance: the alleged lack of clarity of the thresholds, their retroactive nature, the infringement of the creditor’s property right, and the removal of the judge’s role in checking, in each case, whether unforeseeability truly exists.

The Court settled the case along two lines. On one single point (the possibility of using debt-for-asset settlement to cancel even debts already established by final judgments), the challenge was rejected as inadmissible, simply because that issue had already been declared unconstitutional in an earlier decision, from 2021, and reopening the same argument had no further purpose. On all the other objections, the Court rejected the challenge as unfounded, noting that it had already examined the same arguments in three other recent decisions and that there was no reason to depart from that case law.

What it changes in practice

For debtors who took out loans in foreign currency (especially Swiss francs, from the period before the financial crisis) or with a variable interest rate, and who are now facing a sudden rise in costs, the debt-for-asset mechanism remains fully functional. If a debtor can prove that, at some point in the 6 months before the notice, the exchange rate exceeded the rate at loan signing by 52.6%, or that the monthly instalment rose by more than 50% because of the variable interest rate, the lender can no longer dispute in court whether unforeseeability exists, and can only challenge the other admissibility conditions of the procedure.

For banks, the decision definitively closes a line of defence they had been building since 2021, across dozens of joined cases. From now on, any similar challenge raised in other pending cases will be rejected directly by the courts by reference to this decision, without a fresh review on the merits. This is the Court’s third decision on this subject in recent years (after decisions no. 749/2023 and no. 539/2024), a sign that the constitutional court regards the matter as definitively settled. Another recent CCR decision remains relevant too, showing that the constitutional court generally confirms the stability of procedural rules that matter to citizens, rather than reshaping them through case law. The same issue of the Official Gazette of Romania also contains a Constitutional Court decision with a direct economic impact: the rejection of the President’s objection concerning the environmental-assessment exemptions for old hydropower plants in protected natural areas.

What has changed compared with the previous situation

• Nothing in the text: Art. 4(1¹)-(1³), (3) and (4), Art. 5(3) and (3¹), Art. 7(4) and (5¹) and Art. 8(5) first sentence of Law no. 77/2016, as well as Law no. 52/2020 as a whole, remain unchanged.
• One avenue of challenge is closed: arguments about the missing National Bank of Romania opinion, the alleged lack of clarity of the 52.6% and 50% thresholds, or the law’s retroactive character can no longer be used as a constitutional challenge in other cases.
• What was already settled is confirmed once again: Art. 8(5), second and third sentences, of Law no. 77/2016 remain unconstitutional, as established back in 2021: debt-for-asset settlement cannot be used to cancel a debt already fixed by a final judgment or by completed forced enforcement.

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