Payment-in-Kind 2026: Updated Guide for Property Owners

Payment-in-Kind 2026: What You Need to Know

The Payment-in-Kind Law (Legea nr. 77/2016 privind darea în plată a unor bunuri imobile în vederea stingerii obligațiilor asumate prin credite) allows debtors to be released from their mortgage credit by transferring property ownership to the bank. This guide analyzes the conditions, procedure, and recent legislative developments in Romania, providing an updated perspective for property owners in 2026. This legal mechanism offers a crucial safety net for consumers facing substantial financial difficulties related to their real estate loans.

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What is Payment-in-Kind (Dare în Plată)?

Payment-in-Kind (Dare în Plată) is a legal mechanism, regulated primarily by Legea nr. 77/2016, through which the debtor can fully extinguish their mortgage credit by transferring the ownership right of the mortgaged property to the creditor (bank), even if the property's value is less than the outstanding credit balance. This provision diverges from the general principle of civil law that debt is extinguished only upon full payment in money, providing an essential exception for consumer mortgage loans. The core purpose of this law is to protect consumers from the disproportionate risks associated with long-term mortgage contracts, particularly in the face of unforeseen economic fluctuations. It ensures that the debtor, after transferring the property, is completely released from any further obligations related to that credit, including principal, interest, penalties, and commissions, effectively closing the chapter on that particular debt.

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Application Conditions (2026)

To successfully invoke the Dare în Plată mechanism in 2026, several cumulative conditions must be met, as stipulated by Legea nr. 77/2016, art. 3 și art. 4, and further clarified by extensive jurisprudence, including decisions from the Romanian Constitutional Court (CCR).

Mandatory Conditions

Unforeseeability Condition (CCR)

The Romanian Constitutional Court (Curtea Constituțională a României - CCR) fundamentally shaped the application of Dare în Plată with its Decision 623/2016, published in Monitorul Oficial nr. 883 din 7 noiembrie 2016. This decision ruled that Dare în Plată can only be applied if there is unforeseeability (impreviziune) — an exceptional change in circumstances that makes payment excessively burdensome or unjust. This condition ensures that the law is not used by individuals who simply change their mind about a loan or face minor financial inconveniences. The CCR's interpretation effectively embedded the principle of impreviziune, as codified in Art. 1271 of the Civil Code (Noul Cod Civil), into the specific framework of Dare în Plată. The unforeseeability must relate to circumstances that:

• Were not and could not have been foreseen by the parties at the time of contract execution.
• Are independent of the debtor's will.
• Make the execution of the contract exceedingly difficult or unfair.

Specific examples frequently accepted by courts as impreviziune include:

• Significant decrease in property value. While a slight market fluctuation is not enough, a substantial depreciation, making the property's value significantly lower than the outstanding debt, can qualify. Courts often assess this by comparing property values at the time of loan inception versus the current market value.
• Significant increase in installments (e.g., CHF exchange rate). This is a classic example, especially prevalent for loans contracted in Swiss Francs (CHF). A sudden and substantial appreciation of the foreign currency against the Romanian Leu (RON) can make monthly payments unbearable.
• Loss of income due to objective reasons (illness, invalidity, job loss, etc.). The reduction or complete loss of the debtor's income, provided it's due to serious, non-culpable events (e.g., severe illness, permanent disability, involuntary job termination, significant business failure not attributable to mismanagement), can be considered unforeseeability. This must be a long-term or permanent impact, not a temporary setback.
• Other extraordinary events such as natural disasters affecting the property, or major economic crises impacting specific sectors.

The burden of proof for the existence of unforeseeability lies with the debtor. They must convincingly demonstrate to the court that these circumstances meet the strict criteria established by the CCR and subsequent jurisprudence.

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Step-by-Step Procedure for Dare în Plată

The Dare în Plată procedure is a highly formalized process, designed to provide opportunities for negotiation while also establishing clear judicial recourse if an agreement isn't reached. Adherence to each step is crucial for success.

Step 1: Notifying the Creditor (Art. 5, Legea nr. 77/2016)

This is the mandatory initial step, acting as a formal communication to the bank.

• Content of notification: The notification must clearly state:

• The debtor's full identification details.
• The creditor's identification details.
• The details of the credit agreement (contract number, date, amount).
• Clear identification of the mortgaged property (address, cadastral number, land book entry).
• An unequivocal statement of the debtor's intention to transfer ownership of the property in exchange for the full extinguishment of the credit obligation, citing Legea nr. 77/2016.
• Explicitly mention the fulfillment of all legal conditions for Dare în Plată, including the impreviziune element.

• Effect of notification: From the date of verifiable receipt of this notification by the creditor, two critical consequences arise according to Legea nr. 77/2016, art. 5 alin. (3):

• Suspension of payment installments: The debtor is effectively relieved from paying further installments related to that credit. This suspension remains in effect until a final resolution.
• Suspension of any forced execution (executare silită): Any ongoing or impending forced execution procedures initiated by the bank for that specific credit are automatically suspended. This is a powerful protective measure for the debtor.

Step 2: Negotiation Period (30 days - Art. 6, Legea nr. 77/2016)

Upon receiving the notification, the creditor enters a mandatory 30-day negotiation period.

• Creditor's options:

• Acceptance: The bank accepts the Dare în Plată proposal. If this occurs, the parties proceed directly to signing the ownership transfer deed.
• Refusal: The bank explicitly refuses the Dare în Plată proposal.
• Restructuring proposal: The bank might offer alternative solutions, such as refinancing, payment deferral, or partial debt forgiveness.

• Consequences of bank's inaction: If the bank fails to respond within the 30-day period, or if it explicitly refuses to conclude the Dare în Plată deed, the debtor gains the right to initiate court proceedings. This provision is found in Legea nr. 77/2016, art. 6 alin. (2).

Step 3: Court Action (if the bank refuses or fails to respond - Art. 7, Legea nr. 77/2016)

If the bank does not voluntarily accept the Dare în Plată within the 30-day negotiation period, the next step for the debtor is to file a lawsuit.

• Filing a summons (cerere de chemare în judecată): The debtor files a claim with the competent court (usually the court at the debtor's domicile). The claim must reiterate the conditions for Dare în Plată and detail the impreviziune invoked.
• Court's role: The court's primary tasks are to:

• Verify the fulfillment of all legal conditions stipulated in Legea nr. 77/2016, art. 3 și art. 4.
• Analyze the impreviziune according to the CCR criteria and established jurisprudence. This is often the most contentious part of the trial, requiring robust evidence from the debtor. Expert reports on property value depreciation or financial analyses on the impact of exchange rate fluctuations or income loss are frequently submitted.
• Hear evidence: This includes documents, witness testimonies, and expert reports (e.g., economic, real estate valuation).

• Court judgment:

• If the court finds that all conditions are met and the impreviziune is proven, it will issue a judgment admitting the action.
• This court judgment (hotărâre judecătorească) will order the transfer of property ownership from the debtor to the bank, and simultaneously pronounce the full extinguishment of the credit obligation. The judgment becomes the legal basis for the property transfer.

Step 4: Property Transfer and Extinguishment

This final step formalizes the effects of the Dare în Plată.

• Registration of transfer in the Land Book (Cartea Funciară): Once the court judgment becomes final and irrevocable (or once the notary deed is signed, if the bank accepted without court intervention), the ownership transfer is registered in the Land Book. This involves filing an officially certified copy of the judgment (or notary deed) with the Land Book Office. This act officially transfers the property title to the bank.
• Full extinguishment of the mortgage credit: Concomitantly with the transfer, the credit obligation is considered fully discharged. This means the principal, interest, penalties, and any other associated costs are all written off.
• Cancellation of the mortgage: A crucial consequence is the cancellation of the mortgage registered against the property in the Land Book. This officially clears the property of any encumbrances related to the now-extinguished debt.

Comparative Timeline & Costs

*Note: Costs are estimates and can vary significantly based on the specific court, complexity of the case, and chosen legal representation.

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Effects of Payment-in-Kind

The consequences of Dare în Plată are far-reaching for both the debtor and the creditor.

For the Debtor

• ✅ Full extinguishment of the credit: This is the most significant benefit. As per Legea nr. 77/2016, art. 1, the debtor is fully and definitively released from all obligations under the credit agreement, including principal, accrued interest, penalties, commissions, and any other associated costs. The bank cannot pursue the debtor for any difference between the property's value and the loan balance.
• ✅ Elimination of forced execution risk: Any ongoing or potential forced execution procedures by the bank related to that credit are terminated or prevented.
• ✅ No longer owes the difference if property value < credit balance: This is the core protective element of Dare în Plată. Unlike traditional mortgage foreclosures where the debtor might still owe a remaining balance after the property sale, Dare în Plată completely wipes out the debt, regardless of the property's market value.
• ⚠️ Loss of property ownership rights: The debtor relinquishes their ownership of the mortgaged property. This is a non-negotiable consequence.
• ⚠️ Possible reporting to the Credit Bureau (Biroul de Credit): While the debt is extinguished, the bank may report the Dare în Plată event to the Credit Bureau, which could negatively impact the debtor's credit score and ability to obtain future loans. The specific coding of such a report (e.g., "debt extinguished by other means" vs. "default") can vary and might be subject to negotiation or legal challenge.
• ⚠️ Tax implications: There might be local taxes or fees associated with the transfer of ownership that the debtor (as the former owner) might be liable for under specific local regulations, although Legea nr. 77/2016 generally aims to transfer all related costs to the bank. Tax advice is recommended.

For the Creditor (Bank)

• Receives property ownership: The bank becomes the owner of the previously mortgaged property.
• Credit is considered fully paid: From the bank's accounting perspective, the specific credit file is closed as paid.
• Can capitalize on the property through sale: The bank can subsequently sell the property to recover its losses, or integrate it into its asset portfolio.
• Financial write-off: If the property's market value is less than the outstanding debt, the bank must write off the difference as a loss.

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Relevant Jurisprudence 2024-2026

The legal landscape surrounding Dare în Plată continues to evolve, with courts refining their interpretation of key concepts, particularly impreviziune.

Trends Favorable to Debtors

• Courts increasingly recognize unforeseeability for CHF credits: The significant and sustained appreciation of the Swiss Franc (CHF) against the Romanian Leu (RON) remains a primary and widely accepted ground for impreviziune. Courts generally acknowledge the objective nature of this currency fluctuation and its severe impact on debtors.
• The pandemic and energy crisis have been accepted as unforeseeability factors: The COVID-19 pandemic (Order of the Military Commander no. 10/2020 and subsequent legislation) and the ensuing energy crisis (including governmental measures like OUG nr. 27/2022 and further amendments) have created severe economic disruptions. Courts have often considered objective and documented income reductions or business failures directly attributable to these crises as valid grounds for unforeseeability, especially if the impact was long-lasting and severe for the debtor.
• Significant depreciation of the real estate market in a specific area: Beyond general market fluctuations, documented, substantial, and specific depreciation of property values in particular geographical areas or for certain types of properties (e.g., construction materials, specific types of residential areas with decreased demand) can be considered impreviziune. This requires robust expert valuation reports.

Trends Favorable to Banks

• Courts reject claims when income decrease is temporary: If the debtor's income reduction was short-lived, or if they quickly found comparable employment, courts are less likely to accept impreviziune. The impact must be sustained and significantly alter the debtor's ability to pay.
• Simple moderate property depreciation does not constitute unforeseeability: Minor market corrections or a general, non-dramatic decrease in property value are often not sufficient. The depreciation must be substantial and disproportionately affect the debtor by creating an excessive imbalance between the property's value and the remaining debt.
• Credits contracted after 2016 — stricter conditions applied: For loans initiated after the enactment of Legea nr. 77/2016, courts tend to apply a slightly stricter interpretation of impreviziune as parties were theoretically aware of the law's existence and its conditions. However, the fundamental principle of unforeseeability still applies to these contracts. Banks often argue that debtors were aware of currency risks for foreign-denominated loans post-2016, but jurisprudence still largely favors debtors in CHF cases due to the exceptional nature of the CHF surge.
• Lack of diligent dispute resolution: If a debtor has continuously refused bank proposals for credit restructuring or payment deferrals without reasonable grounds, this might be viewed unfavorably by courts, suggesting a lack of good faith in attempting to resolve the situation prior to invoking Dare în Plată.

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Special Situations in Dare în Plată

The application of Dare în Plată can become more complex in specific scenarios.

CHF (Swiss Franc) Credit

• The most common case for Dare în Plată: Loans denominated in CHF (Swiss Francs) represent a significant portion of Dare în Plată cases in Romania.
• The dramatic increase in the CHF exchange rate (from ~2 RON to ~5 RON) constitutes unforeseeability: Courts consistently recognize the exceptional and unpredictable appreciation of the CHF against the RON as a clear case of impreviziune. This drastic change made the repayment burden for thousands of Romanian debtors unbearable, far beyond what could have been reasonably foreseen at the contract's inception. This is often viewed as a systemic issue rather than an individual debtor's fault.

Credit with Guarantors / Co-debtors

• Guarantors are released upon credit extinguishment: According to Legea nr. 77/2016, art. 1 alin. (1), the full extinguishment of the credit obligation through Dare în Plată also extinguishes any accessory guarantees, including personal guarantees (e.g., suretyship, fideiusiune). Therefore, any personal guarantors (garanți) are released from their liabilities.
• Co-debtors must agree to the Dare în Plată: If there are multiple co-debtors (e.g., spouses, family members jointly liable for the credit), all co-debtors must participate in the Dare în Plată procedure and express their intention to transfer the property. One co-debtor cannot unilaterally initiate this process without the consent of the others, as it affects their joint property rights and obligations.

Co-owned Property

• All co-owners must participate in the procedure: If the mortgaged property is co-owned (e.g., by spouses under community property, or by multiple heirs), all co-owners must join the Dare în Plată request.
• The agreement of all is necessary: The legal act of transferring ownership requires the consent of all owners. If one co-owner refuses, Dare în Plată cannot proceed, as the property cannot be transferred partially or without universal consent. This necessitates careful coordination among all parties involved.

Refinanced Credit

• Dare în Plată also applies to refinanced credits: Even if a credit has been refinanced one or more times, it can still be subject to Dare în Plată.
• The date of the initial contract, not the refinancing, is relevant: Crucially, when assessing the condition of impreviziune, courts will consider the date of the initial credit contract when the original conditions were agreed upon, not the date of the refinancing agreement. The refinancing typically aims to restructure an existing debt, and the new agreement is often a consequence of the very impreviziune that the debtor now invokes (e.g., adapting to higher CHF installments). This distinction is vital for establishing the foreseeability of events.

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Compliance Checklist for Property Owners Considering Dare în Plată

Before initiating the Dare în Plată procedure, it's essential for property owners to thoroughly assess their situation against the legal requirements. This checklist helps assess compliance.

1. Credit Type Verification:

• Is the loan explicitly a mortgage credit, secured by a real estate property? (Refer to loan agreement, mortgage contract details).
• Legal basis: Legea nr. 77/2016, art. 3 lit. a)

2. Debtor Status Confirmation:

• Are you a natural person (consumer), not a legal entity (e.g., SRL - minimum 500 RON capital, or PFA)?
• Legal basis: Legea nr. 77/2016, art. 3 lit. b)

3. Mortgaged Property Assessment:

• Is the property the sole asset mortgaged in favor of the creditor for this specific credit? (Check all loan documentation and land book entries for other collateral).
• Legal basis: Legea nr. 77/2016, art. 3 lit. c)
• If co-owned, have all co-owners agreed to proceed with Dare în Plată?

4. Criminal Record Check (Self-Assessment):

• Have you been convicted of any economic crimes related to the credit contract? (Final conviction is key).
• Legal basis: Legea nr. 77/2016, art. 3 lit. d)

5. Unforeseeability (Impreviziune) Justification:

• Can you clearly identify and document an exceptional change in circumstances since the credit was contracted?
• Significant income reduction (illness, invalidity, involuntary job loss)?
• Substantial increase in loan installments (e.g., CHF exchange rate)?
• Major, documented decrease in the property's market value?
• Was this circumstance unforeseeable at the time of contract signing?
• Is this circumstance independent of your will?
• Does it make repayment excessively burdensome or unjust?
• Legal basis: CCR Decision 623/2016; Art. 1271 Civil Code.

6. Documentation Gathering:

• Original loan agreement and any addenda/refinancing contracts.
• Mortgage contract and related land book excerpts (extras de carte funciară).
• Proof of property ownership.
• Statements of account from the bank showing payment history and outstanding balance.
• Evidence of impreviziune (e.g., medical certificates, unemployment records, termination letters, expert valuations, exchange rate data for CHF loans).
• Any correspondence with the bank regarding financial difficulties or restructuring attempts.

7. Legal Consultation:

• Have you consulted with a specialized lawyer to assess your specific case and gather required documentation? (Highly recommended before proceeding).

8. Notification Preparation:

• Are you prepared to send a formal notification via judicial enforcement officer or registered mail with AR?
• Does the notification contain all mandatory information (credit details, property ID, intent to elect Dare în Plată)?
• Legal basis: Legea nr. 77/2016, art. 5

9. Financial Preparedness:

• Are you aware that payments are suspended upon notification, but expert fees may still arise if the bank refuses?

Completing this checklist will provide a clearer picture of your eligibility and the strength of your case, helping you proceed strategically.

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FAQ Section: Payment-in-Kind in Romania (2026)

Here are some frequently asked questions regarding Dare în Plată in Romania for property owners in 2026.

1. Is Dare în Plată applicable to any type of loan, or only mortgages? Dare în Plată is specifically applicable only to mortgage credits that are secured by a real estate property. This means loans taken out for other purposes (e.g., personal consumption, car loans) even if large, do not qualify unless a primary residence or another specific property was formally mortgaged as collateral for that particular credit. This is clearly stated in Legea nr. 77/2016, art. 3 lit. a).

2. What happens if I have multiple properties mortgaged for the same loan? If multiple properties are mortgaged to secure a single loan, the Dare în Plată mechanism might not be applicable. Legea nr. 77/2016, art. 3 lit. c) explicitly states that the mortgaged property must be "the sole asset mortgaged in favor of the creditor." If there are other assets or guarantees (including other properties) pledged for the same credit, this condition is not met, complicating or preventing the application of Dare în Plată.

3. Will my credit score be affected if I use Dare în Plată? Yes, it is highly likely that your credit score will be negatively affected. While the debt is legally extinguished, the bank may report the Dare în Plată event to the Biroul de Credit (Credit Bureau) with a specific code indicating debt extinguishment through alternative means. This entry can make it more difficult or impossible to obtain new credit for a certain period, typically several years. The exact impact depends on the specific reporting code used by the bank and the policies of lenders assessing your creditworthiness.

4. What if the bank refuses my Dare în Plată notification? If the bank refuses your formal notification (or fails to respond within 30 calendar days), you have the legal right to file a lawsuit (acțiune în justiție) with the competent court. The court will then evaluate if all legal conditions, including impreviziune (unforeseeability), are met. If successful, the court's judgment will substitute the parties' agreement, ordering the property transfer and debt extinguishment. This is covered by Legea nr. 77/2016, art. 7.

5. Can I still invoke Dare în Plată even if I am already in forced execution? Yes. One of the key protective provisions of Dare în Plată is found in Legea nr. 77/2016, art. 5 alin. (3). Once the formal notification is duly communicated to the creditor, any ongoing forced execution procedures related to that credit are automatically suspended by law. This suspension lasts until a final resolution is reached, either through agreement or a court judgment.

6. What are the key elements I need to prove for impreviziune? To prove impreviziune, as per CCR Decision 623/2016 and Art. 1271 of the Civil Code, you must demonstrate three cumulative elements: a. The exceptional circumstances that led to your inability to pay were unforeseeable at the time the loan contract was signed. b. These circumstances are independent of your will (e.g., not due to voluntary career changes without income planning, or reckless spending). c. These circumstances make the continued execution of the contract excessively burdensome for you, leading to a significant imbalance between the parties' obligations. Examples include a drastic increase in CHF exchange rates, severe and prolonged loss of income due to illness, or substantial, documented property value depreciation.

7. Does Dare în Plată apply to commercial companies (SRLs)? No, Dare în Plată is a consumer protection law. It applies exclusively to natural persons (consumers). Commercial companies, including SRLs (regardless of their share capital, which is 500 RON in 2026 as per Legea nr. 239/2025), cannot invoke this legal mechanism. This is specified in Legea nr. 77/2016, art. 3 lit. b). Other legal avenues for debt restructuring might be available for companies, but not Dare în Plată.

8. What costs am I liable for during the Dare în Plată process? The court fees for filing the action will also be incurred by the debtor. However, if the Dare în Plată is successful and the property transfer occurs, Legea nr. 77/2016, art. 8 alin. (2) stipulates that all notary fees, Land Book registration fees, and any other taxes or fees related to the transfer of ownership are borne by the creditor (bank).

9. What if the property is in a dilapidated state or has legal issues? The obligation to transfer ownership implies handing over the property as it stands. While structural issues might influence the bank's willingness to accept voluntarily, they typically do not bar the legal Dare în Plată process itself, as the bank receives the property "as is." However, if there are significant legal issues (e.g., hidden claims, unresolved litigations, unauthorized constructions not declared) that were not known and declared, these could complicate the transfer or lead to further disputes. It's crucial that the property's legal status is compliant.

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This article is for informational purposes only and does not constitute legal advice. For specific situations, please consult a specialized lawyer. Given the complex and evolving nature of jurisprudence, especially regarding impreviziune, seeking professional legal counsel is paramount before taking any action.

The legislation cited has been amended since this article was written. Check the current consolidated version on legislatie.just.ro.