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Deservingness in over-indebtedness: gross negligence, bad faith, fraud and the other conditions of art. 69 CCII

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In breve: in over-indebtedness, deservingness is the condition on which the court is most attentive. For the consumer, art. 69 of the Codice della crisi excludes from debt restructuring anyone who has already been discharged in the five years before the application, anyone who has already benefited from discharge twice, and anyone who caused the over-indebtedness through gross negligence, bad faith or fraud. Similar conditions apply to discharge in liquidation and to discharge of the debtor with no assets (arts. 282 and 283). The assessment is the judge's, on the specific case: for you, what matters is to explain causes and diligence well, with documents.

The conditions of art. 69

Gross negligence is not mere carelessness: it is a judgement on the debtor's conduct in light of their circumstances. For this reason the OCC reports on the causes of the indebtedness and diligence (art. 68, paragraph 2).

And the creditor?

Art. 69 also contains a rule on the lender side: a creditor who culpably caused or aggravated the indebtedness, or who breached the principles on creditworthiness (art. 124-bis of the Consolidated Banking Act, Testo unico bancario), may not oppose court confirmation by challenging the convenience of the plan. The OCC also reports whether the lender assessed the debtor's creditworthiness, in relation to available income after deducting a dignified standard of living (art. 68, paragraph 3).

In the other procedures

In controlled liquidation, discharge does not operate in case of a final conviction for the offences under art. 344, or where the over-indebtedness was caused by gross negligence, bad faith or fraud (art. 282, paragraph 2). In the discharge of the debtor with no assets, the judge checks the absence of fraud and of wilful misconduct or gross negligence in creating the indebtedness (art. 283, paragraph 7).

How to prepare your answers

Three habits help: set out the facts with dates and documents (loss of employment, illness, separation, guarantees given), list all acts carried out in the last five years, including donations and preferential payments, and do not conceal what the court will find in the registers anyway (property, shares, protests). Veryfy's questionnaire contains exactly these questions, and the report records your answers as your own statements, without judging them: the assessment belongs to the lawyer.

This guide explains the law in general terms and is not legal advice: anyone in over-indebtedness needs a professional who looks at their case and the law currently in force.

Before you see the lawyer, get your case in order: the free questionnaire collects creditors, income, expenses, assets and acts of the last five years; the Over-indebtedness report at 29€ checks them against public data in your name (protests, procedures, encumbrances, positions held, shares, property) and gives you the PDF to hand to the professional. It is not legal advice, nor the OCC report.

Sources

Frequently asked questions

What does deservingness mean in over-indebtedness?

It is the set of subjective conditions the judge checks: absence of fraud, bad faith or gross negligence in creating the indebtedness, and compliance with the limits on previous discharges.

If I have already been discharged, can I try again?

For the debt restructuring of the consumer, art. 69 excludes anyone who has been discharged in the five years before the application or who has already obtained two discharges; discharge of the debtor with no assets is allowed only once.

Do gambling expenses exclude me from the procedure?

There is no automatic rule: the judge assesses whether the over-indebtedness was caused by gross negligence, bad faith or fraud. It must be disclosed honestly to the lawyer, who assesses how to present it.

What if the bank granted a loan without checking income?

The OCC reports whether the lender assessed creditworthiness, and a creditor who breached the principles on creditworthiness may not oppose court confirmation by challenging the convenience of the plan (art. 69).

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