Legal alert no. 92
Legal scheme of mass credit assignment
Decree-Law no. 42/2019
On March 28th 2019, was published the Decree-Law no. 42/2019, as a result of the implementation of Programa Capitalizar (Capitalize Program), within the Programa Nacional de Reformas (National Reforms Program), approved by Resolution of the Council of Ministers no. 42/2016 of 18 of august.
In order to expedite company’s access to financing through equity or debt capital, the Decree-law no. 42/2016 has changed the processes and procedures related to the mass assignment of credits, creating a simplified scheme for the said assignment.
The scope of the Decree-Law no. 42/2019 is limited to the mass assignment of credits, that is a contract through wich the creditor transfers to a credit institution, a financial company or a credits securitization company a set of portfolio credits higher than fifty different credits, against the overall disposal price of, at least, 50.000,00€ (fifty thousand euros).
The simplified scheme created by the Decree-Law no. 42/2019 involves the contracting procedures of the mass assignment of credits and the formalities for the transferee to intervene on the ongoing legal actions.
Regarding the contracting procedures, the assignment of credits is now entered through a document with notarized signatures. This document is sufficient for the registration of the credits assignment when the transferor and the transferee’s signatures are certified. The necessary registries are now carried out in a centralized manner, under a single and faster process, in a unique presentation. Also, the evidence of the tax property situation, referred in article 31 of the Real Estate Registry Code, is no longer needed in these cases.
Concerning the formalities to intervene on ongoing legal actions, the Decree-Law no. 42/2019 only demands the transferee to submit to the court a copy of contract of the mass assignment of credits. However, the transferor and the opposing party may always require the transferee’s intervention in accordance with article 356, no. 2 of the Portuguese Civil Procedure Code.
Finally, according to Decree-Law no. 42/2019, the transferor is obliged to notify the transferee on the starting of any legal actions regarding the assigned credit, within the maximum period of five days, starting from the date of service of process.