Abstract

In the article the author presents some practical comments on overcollateralization of debts trough establishing mortgage in an excessive amount. He analyses the debtor’s right to demand reduction the mortgage value as provided for in 2nd sentence of Art. 68(2) of the Act on Land and Mortgage Registers and on Mortgage. This regulation indicates that the owner of a mortgaged property is entitled to demand the amount of mortgage to be reduced if it is excessive. This right may be exercised by bringing in an action. The author raises the question of when does mortgage overcollateralization arise. To this end, he uses the method of a comparative legal analysis to define mortgage overcollateralization and determine the its limits of . The author states that on one hand overcollateralization may be very attractive for the creditor as it somehow maximizes the their protection. On the other hand, establishing an excessive mortgage collateral may lead to an actual, long-lasting, economically unjustified dependency of the debtor upon the creditor. This problem has been recognized by the courts which ever more often refer to the problem of overcollateralization of debts and its legal consequences.