The 250,000 euro ceiling on debt-for-asset settlement stays: CCR dismissed the borrowers’ request

The ceiling of 250,000 euro that decides who may hand the home to the bank in exchange for the whole loan stays in the law. The Constitutional Court dismissed as unfounded the plea raised by two borrowers in proceedings at the Buftea District Court and by a third borrower in proceedings at the District Court of Bucharest, Sector 1, all three unhappy that the amount they borrowed keeps them outside Law no. 77/2016. The decision was taken in the same sitting of 16 December 2025 in which the Court also dismissed the banks’ challenge to the same law, by Decision no. 807/2025. The same day, the same law, two opposing camps, the same answer: the text is not to be touched.

Debt-for-asset settlement is the mechanism by which a person who can no longer pay the instalments hands the mortgaged property to the bank and, with it, is freed of everything still owed on that loan. Not just of part of it. Even if the home is worth less today than the outstanding balance, the difference can no longer be claimed. That is where the appeal of the law lies, and that is also where the limits the legislature placed around it come from.

The limits are written in Article 4(1) of Law no. 77/2016 and must be met, the text says, „cumulatively”. That is, all of them, not one of your choosing. The authors of the plea attacked three things at once: the very phrase „cumulatively” in the introductory part of the article, letter (b), which sets the ceiling of 250,000 euro, and letter (c), which requires the property to be in residential use.

Their argument was that the ceiling creates discrimination between people in the same situation. The fall in value of a mortgaged flat, they said, hits equally someone who borrowed 200,000 euro and someone who borrowed 300,000, so there is no reason to treat them differently. The second argument concerned the clarity of the law: nowhere in Law no. 77/2016 does it say what a dwelling is, and the wording „for the purpose of acquiring, building, extending, modernising, fitting out or rehabilitating a property in residential use” leaves, they argued, too much room for interpretation.

The Court dismissed both criticisms, relying on what it had already said in other cases. On the ceiling, it took up Decision no. 328 of 10 May 2018: a maximum threshold is not discrimination as long as those who fall above it have another legal route open. On the notion of dwelling, it took up Decision no. 373 of 3 June 2021: the definition does exist, only not in Law no. 77/2016, but in Article 2(a) of Housing Law no. 114/1996, republished in Official Gazette of Romania no. 393 of 31 December 1997. There, a dwelling is „a building made up of one or more habitable rooms, with the outbuildings, fittings and utilities needed, which meets the housing requirements of a person or a family”. As for „cumulatively”, the Court wrote that the phrase has a clear, precise and foreseeable content, because it means one thing only: all the conditions, together.

The very presumptions that prove hardship were challenged separately by four banks, and the Court dismissed that attack as well, in CCR Decision no. 644/2025.

What it changes in practice

The decision does not change a single letter of Law no. 77/2016. It is a dismissal, not an admission, so its practical effect is to close off a route of challenge. From 2 September 2026, the date of publication in the Official Gazette of Romania, the decision is final and generally binding, under Article 147(4) of the Constitution. In concrete terms, a judge at any court in the country can no longer send to the Constitutional Court the same criticism, framed in the same way, against the same texts. Anyone who raises it again risks having it dismissed as inadmissible.

For a person with a mortgage, the map remains this one. In order to hand the home to the bank and be free of the whole loan, he has to meet at the same time all the conditions in Article 4(1):

The first, letter (a): the lender must be a bank, a non-bank financial institution or someone who bought the claim from them, and the borrower must be a consumer, that is, must have borrowed for personal needs, not for his business. The second, letter (b): the amount borrowed, calculated at the time it was granted and at the National Bank of Romania rate of the day the contract was signed, must not have exceeded the leu equivalent of 250,000 euro. The third, letter (c): the loan must have been taken to buy, build, extend, modernise, fit out or rehabilitate a property in residential use, or, whatever it was taken for, must be secured by at least one property in residential use. The fourth, letter (d): the borrower must not have been convicted by a final judgment of offences connected with that loan. The fifth, letter (e), added in 2020: the unforeseeability condition must be met.

To these the Court adds, in Decision no. 808/2025, two clarifications that cannot be read out of the article but that weigh heavily in court. The first: someone who signed the loan as the holder of a commercial, industrial, manufacturing, craft or professional activity does not have consumer status, so he cannot use the law, however much the property may look like a home. Here the Court refers to the judgment of the Court of Justice of the European Union of 20 January 2005 in Case C-464/01, Johann Gruber v Bay Wa AG. The second, and more direct: „a borrower who does not actually live in the residential property cannot rely on the benefits of the law on debt-for-asset settlement”. A flat bought as an investment and rented out is out of the discussion, even if the papers say it is a dwelling.

What has changed compared with the previous situation

Through this decision, nothing. It is worth stating plainly, though, what has changed since the law was adopted, because the text quoted in the decision is truncated and a hurried reader may come away with an incomplete list. The Court reproduces the introductory part of Article 4(1) and then puts „[…]”, skipping letter (a), and quotes in full only letters (b) and (c), the ones it is ruling on. The rest of the list is missing from the decision, but not from the law.

Law no. 77/2016 was published in Official Gazette of Romania no. 330 of 28 April 2016 with four conditions, letters (a) to (d). Law no. 52/2020, published in Official Gazette of Romania no. 386 of 13 May 2020, added a fifth, letter (e), unforeseeability, and explained in Article 4(1^1) when it is deemed to be met. There are two situations, each with its own figure. The first: the exchange rate rises by more than 52.6% between the day the contract was signed and the day the debt-for-asset settlement notice is sent. The second: the monthly instalment rises by more than 50% because of an increase in the variable interest rate. Article 4(1^2) requires the threshold to have held over the six months before the notice, and Article 4(1^3) turns these situations into irrebuttable presumptions, which shifts the burden of proof onto the lender who disputes them.

So the form of Article 4(1) in force on 2 September 2026 has five letters, not four. The ceiling of 250,000 euro in letter (b) is the only element that has not moved at all since 28 April 2016, that is, for 3,779 days, a little over ten years and four months. The law contains no mechanism for updating it.

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