The new framework for private debt is now in effect, following the passage of the relevant law by Parliament. The Ministry of National Economy and Finance is moving forward with a package of measures that changes the way debts are handled, both with respect to the government and to banks and servicers.

The new regulations concern court rulings under the former Katseli Law, the out-of-court mechanism, the 72-installment plan for debts owed to the government, the limits of the exemption from seizure, as well as the protection of the primary residence. According to the ministry, more than 2 million citizens are estimated to be affected by the changes.

Minister Kyriakos Pierrakakis, in a statement to the Athens-Macedonian News Agency (ANA-MPA), said: “Private debt is perhaps the most complex social consequence of the crisis. It is measured in insecurity, in delayed life decisions, in people who feel that the past continues to determine their future.”

He added: “Our job is to break this vicious cycle with solutions that create real second chances. Every action we take regarding private debt serves the obligation to reduce burdens, restore potential, and offer new horizons. The true success of economic policy is measured by the number of citizens who feel they are regaining control of their lives. And that is, ultimately, the most meaningful form of progress for society.”

The seven key changes brought about by the new law

1. Interest rates on court-approved repayment plans under the Katseli Law are being reduced

The most significant change affects those with active court-approved repayment plans under the former Katselis Law.

From now on, interest will be calculated only on the monthly installment and not on the total outstanding balance of the debt. This significantly reduces the total cost of servicing the loans.

At the same time, the new regulation also has retroactive effect on active cases. Any excess amounts already paid as interest will be offset against the final installments, allowing many borrowers to complete their repayment earlier.

2. The method for calculating installments under other debt relief programs is “locked in”

For those who have entered into other debt settlement arrangements, such as through the out-of-court mechanism or Law 4605/2019, the monthly installment will no longer be subject to additional interest or recalculation.

This provision applies retroactively as of April 1, 2019 and affects tens of thousands of debtors.

3. New payment plan of up to 72 installments for debts owed to the government

The new law introduces an emergency payment plan of up to 72 installments for debts owed to the AADE and the KEEO.

This option applies to debts incurred up to December 31, 2023 and were not subject to an active payment plan as of April 21, 2026.

Applications will be submitted electronically, and the repayment plan will take effect upon payment of the first installment. Enrollment will remain open until December 31, 2026.

4. The exemption from seizure for bank accounts is increasing

After about ten years, the exemption limit for debts owed to the government is increasing.

The threshold is rising from 1,250 euros to 1,600 euros per month.

At the same time, for debts owed to private individuals and banks, the exemption is set as follows:

  • 1,600 euros for individual accounts.
  • 2,200 euros for joint accounts.

5. Lifting of seizure upon payment of 25% of the debt

For the first time, the option is introduced for the full lift the attachment of bank accounts, provided that the debtor pays at least 25% of the debt for which the enforcement measures were imposed.

This option will be available only once to each debtor.

6. Out-of-court mechanism also for smaller debts

Access to the out-of-court mechanism.

The minimum debt threshold is being lowered from 10,000 euros to 5,000 euros, allowing more small debtors to participate in the process.

The arrangements may include:

  • up to 240 installments for debts owed to the government,
  • up to 420 installments for debts owed to financial institutions.

The measure is expected to take effect in late July.

7. Protection of the primary residence through out-of-court proceedings

For the first time, a special provision is introduced to protect the primary residence through the out-of-court mechanism.

The debtor will be able to exclude their primary residence from the liquidation process and propose the sale of other assets, such as a plot of land or a second property.

In this way, they may be able to secure a more favorable agreement, a larger debt reduction and lower monthly payments, while this option is expected to become available in September.