Greece will broaden access to its out-of-court debt settlement mechanism from July 27, allowing individuals with total debts of at least 5,000 euros to apply for restructuring, in a move expected to extend eligibility to around one million additional borrowers.
The reform lowers the minimum debt threshold from 10,000 euros to 5,000 euros, significantly expanding the scope of the scheme for households, self-employed professionals and small debtors.
The mechanism enables borrowers to restructure obligations owed to the tax authority, social security funds, banks and loan servicers through a single application.
Until now, debtors with total liabilities below 10,000 euros were excluded from the scheme, leaving many exposed to enforcement measures such as bank account seizures, asset attachments and other debt collection procedures.
Under the new rules, debts exceeding 5,000 euros will qualify, regardless of whether they relate to a single creditor or are spread across multiple creditors, including the Independent Authority for Public Revenue (AADE), the e-EFKA social security fund, banks and credit servicers.
A key benefit of joining the mechanism is that enforcement measures are suspended once an application is formally submitted, providing temporary protection against seizures and other collection actions by both public authorities and private creditors.
The scheme also offers extended repayment periods of up to 240 monthly instalments for debts owed to the state and social security funds, and up to 420 instalments for bank loans and claims managed by credit servicers.
Depending on the applicant’s income and assets, the platform’s automated assessment may also recommend a partial write-down of outstanding debt in eligible cases.
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