Regulatory Alerts2013-09-03
Guidelines for the Management of Arrears Accrued as a Result of Customers’ Breach of Financial Obligations under Credit Agreements
The Bank of Lithuania issued amended guidelines requiring lenders and peer-to-peer lending platform operators to manage mortgage arrears through proactive engagement and cooperation with borrowers in financial difficulty. The document mandates clear pre-contractual disclosure of credit consequences and establishes specific procedures for notifying borrowers of defaults, including detailed breakdowns of overdue amounts and reasonable repayment terms. These measures aim to promote good faith practices, encourage debt restructuring, and avoid foreclosure by ensuring consistent implementation of legal obligations under Lithuanian and EU law.
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