EXCEPTIONAL CREDIT PROTECTION MEASURES

The covid-19 pandemic had a significant impact on the Portuguese economy. Many families and companies found themselves with less liquidity and, therefore, there was a need to readjust and reschedule payments related to bank liabilities, thus preventing families and companies that have credits from entering into a situation of contractual default.

The Portuguese Government understood that it was necessary to support the recovery of the economy by supporting families and companies that are experiencing difficult times, therefore the need to update the diploma that defines a set of measures to protect the credits of families, companies and private institutions of social solidarity and other entities of the social economy.

The diploma published on June 16 extends the term of the moratorium, also provides for the expansion of the universe of potential beneficiaries and also extends the scope of credit operations that may be subject to it.

The term of the moratorium is generally extended until March 31, 2021, and families, companies and other beneficiary entities that have not yet adhered to the moratorium may do so, and must communicate their intention to the institutions until June 30, 2020.

Beneficiary entities that have adhered to the moratorium are automatically covered by the additional period of the diploma, except when they communicate their opposition until September 20, 2020.

This diploma is now applicable to citizens who do not have residence in Portugal, thus covering emigrant citizens.

It is further determined that the factors of income loss may occur, not only in the borrower, but also in any member of his household, providing for a new eligibility factor associated with the proven fall in the overall income of the household at least 20%, in order to protect borrowers who do not fit into the other situations already covered.

The update of the diploma defines the extension of the moratorium to all mortgage credit contracts, as well as credit to consumers for the purpose of education, including for academic and professional training.

The diploma also reflects adjustments to the special regime for granting personal guarantees provided by the State, so as, on the one hand, to cover credit insurance, in transactions between companies, in the domestic market, which assume an essential role both in boosting the domestic market, either in maintaining the export capacity of national companies and, on the other hand, adapting the regime to situations where the guarantee is granted in the context of initiatives, programs or other support measures adopted within the framework of the European Union, namely by European institutions or under European instruments or mechanisms.

For this purpose, you can consult all the details of this diploma by accessing Decree-Law no. 26/2020 of 16 June, which amended Decree-Law no. 10-J / 2020 of 26 March.