Discharge of Liabilities for Pre-crisis Mortgage Loans

In accordance with Clause 88 of the Transitional Provisions of the Credit Institution Law (available in Latvian) Rietumu Banka as a lender is entitled to unilaterally discharge in full or partially credit liabilities of private individuals which were not fulfilled due to an economic crisis of year 2008. Such credit liabilities of private individuals must meet ALL of the following conditions:

  1. The Loan agreement is entered into with a private individual;
  2. Private individual is not and was not a person related to Rietumu Banka for the purposes of the Law on Taxes and Duties (available in Latvian);
  3. Liabilities are determined by the Loan agreement which is entered into and became effective until 31 December 2008;
  4. Discharge of the liabilities was secured by the collateral – mortgage of real estate;
  5. The debtor or the pledgor in respect of the debt liabilities towards Rietumu Banka in accordance with the procedure established by the Civil Procedure Law (available in Latvian), or in accordance with the agreement with Rietumu Banka, lost the right of ownership of the pledged real estate (the collateral has already been sold, but has not fully covered the debt liabilities) until 31 December 2018;
  6. According to the requirements of the International Financial Reporting Standard (IFRS) for the purposes of the Regulation No. 1606/2002 of the European Parliament and of the Council of July 19, 2002 "On the Application of International Accounting Standards" the credit liabilities are disclosed in the accounting of Rietumu Banka as an asset written off the balance sheet;
  7. Insolvency proceedings have not been initiated in respect of the respective private individual.

Discharge or reduction of liabilities of the private individual is considered by Rietumu Banka individually, taking into account the following criteria:

  1. Existing legal proceedings and/or enforcement proceedings;
  2. Whether the private individual acted in good faith during the debt recovery process;
  3. Efforts of the private individual to reach an agreement with Rietumu Banka on the fulfilment of the outstanding liabilities;
  4. The private individual has reached the retirement age;
  5. Occupation and amount of income of the private individual (if such information is available);
  6. Other criteria in accordance with the internal regulations of Rietumu Banka.

This information is for informational purposes only and does not impose any obligations on Rietumu Bank