The Ministry of National Economy and Finance<\/b> is developing a new framework of measures for private debt<\/b>.<\/p>\n
The new framework combines changes to the judicial regulations governing \u201cnon-performing loans,\u201d new options within the out-of-court mechanism, debt settlement with the government, and new safeguards against seizures.<\/p>\n
The amendments to the \u201cKatseli Law,\u201d the out-of-court debt settlement mechanism, 72 installments, and exemption from seizure are changing the daily lives of\u2014in total\u2014more than 2 million households that either have active debt settlement agreements under Law 3869\/2010, or have accumulated debt since the pandemic and the major energy crisis, or are small-scale debtors with debts of up to 10,000 euros owed to the tax authorities and social security funds, are seeking solutions and a way out of their predicament, through debt \u201chaircuts,\u201d payment plans of up to 240 or 420 installments, or, going forward, protection of their homes from foreclosure through out-of-court settlements.<\/p>\n
\u201cPrivate debt is perhaps the most complex social consequence of the crisis. It is measured in terms of insecurity, delayed life decisions, and people who feel that the past continues to determine their future,\u201d emphasizes the Minister of National Economy and Finance Kyriakos Pierrakakis<\/b>, in a statement to the Athens-Macedonian News Agency (ANA-MPA).<\/p>\n
As the minister notes, \u201cOur job is to break this vicious cycle with solutions that create real second chances. Every measure we take regarding private debt serves our obligation to reduce burdens, restore potential, and offer new prospects. 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,\u201d emphasizes Kyriakos Pierrakakis.<\/p>\n
The new measures, which are beginning to take effect following the passage of the omnibus bill (Law 5313\/26), are as follows:<\/p>\n
1) Recalculation of interest \u201cper installment\u201d rather than on the total debt for court-ordered debt settlements (Law 3869\/2010)<\/b><\/p>\n
The central focus of the new framework is the intervention in judicial debt settlements under Law 3869\/2010 (known as the former \u201cKatseli Law\u201d).
The new provision (Article 126 of the law) takes effect upon publication in the Government Gazette. This immediately reduces the current monthly installment that debtors pay going forward. The provision explicitly clarifies (nearly 16 years after the enactment of Law 3869\/2010) that interest on claims settled by court order will now be calculated solely on the monthly installment set by the court.<\/p>\n
In practice, this means:<\/b><\/p>\n
– the interest\u2014which Law 3869\/2010 stipulated must be imposed, without, however, specifying the basis on which it would be calculated\u2014is virtually eliminated. Based on the interpretation provided by the Supreme Court, the government enacted legislation stipulating that, from now on, interest will be calculated only on each monthly installment for a 30-day period, rather than on the current total outstanding balance\u2014as is generally the case and applied to interest on loan debts.<\/p>\n
The new law stipulates that every monthly payment ordered by a court decision directly reduces the principal amount of the debt. Interest resulting from the new calculation is also added to the monthly payment.<\/p>\n
For example, if the court under Law 3869\/2010 ruled that, after liquidations and debt \u201chaircuts,\u201d the debtor must repay a final total debt of 144,500 euros over 25 years (i.e., 300 installments) at an interest rate of 3.6%:<\/p>\n
\u2014following the method of calculating interest on the total debt, until now interest at 3.6% had been applied to the 144,500 euros, which was the remaining debt. The debtor paid an installment of 731 euros each month. In total, this amounted to 219,352 euros over 25 years; while the debtor had fully repaid the principal (144,500), they also paid an additional 74,852 euros in interest.<\/p>\n
\u2014Under the terms now established \u201cby law\u201d and universally applied going forward, the debtor must now pay an installment of approximately 482 euros for 300 months to repay the principal of the debt (144,500 euros over 25 years). In addition, each installment will include 3.6% interest, which will be calculated on a monthly basis\u2014that is, over the 30 days between installments\u2014and amounts to approximately 1 euro extra each month. Thus, the debtor\u2019s monthly payment totals 483 euros. In 300 months, they will have ultimately paid 144,933 euros\u2014that is, 144,500 euros toward their principal, but only 430 euros in total interest over the 25 years.<\/p>\n
This calculation will apply from now on until the repayment is complete. However, under the Pierrakakis provision, the measure will also apply retroactively: excess payments for higher interest rates that have already been made over the past 5\u201310 years since these arrangements were issued by the courts under the \u201cKatseli Law\u201d (Law 3869\/2010), will be offset by an equal amount from future installments of the repayment plan for the more than 100,000 individuals (households) with active repayment plans that have not yet been completed or have not expired.<\/p>\n
In practice, over the coming months, each bank or servicer will calculate how much the borrower has paid in additional interest from the start of the repayment plan to the present (the date the new law was published). This additional amount will be deducted from the final installments of their loan. As a result, these debtors will pay off their loans faster than the court had stipulated (e.g., in 20 years instead of 25), since the final installments will be considered already paid off.<\/p>\n
However, for court-ordered repayment plans that have already been completed or have lapsed and are no longer active, the law stipulates that any additional amounts paid by debtors \u201cshall not be recovered\u201d and will not be refunded to them.<\/p>\n
2) Interest \u201cfreeze\u201d for arrangements under other laws<\/b><\/p>\n
In addition to the \u201cKatseli Law,\u201d another provision also protects those who entered into administrative or out-of-court debt settlement arrangements under other laws (such as Law 4605\/2019 or the out-of-court mechanism under Law 4738\/2020). Article 127 provides that the monthly installment that debtors are required to pay will be considered an amortizing installment on the total amount of the debt subject to the arrangement, based on the interest rate, the repayment term, and the other terms of the arrangement. In other words, no additional charges or recalculations will be permitted beyond those already incorporated into the approved arrangement. This provision takes effect retroactively as of April 1, 2019, and applies to more than 60,000 debtors who have settled debts totaling over 19 billion euros, under these laws.<\/p>\n
3) Special 72-installment repayment plan for the State<\/b><\/p>\n
Particular emphasis is also placed on the new 72-installment payment plan, which is established by the new law and is expected to take effect immediately. It applies exclusively to \u201cold\u201d debts (prior to 2024) owed to the government and social security agencies. At that time, more than 1 million debtors (Tax Identification Numbers) owed at least 500 euros or more to the tax authorities, according to data from the State Budget Office in Parliament.<\/p>\n
In practice, two distinct programs are being activated, each with a different enrollment process (one for debts owed to the Independent Authority for Public Revenue [AADE] and another for debts owed to the Social Security Fund [KEAO]\/National Social Security Agency [EFKA]), which will \u201crun\u201d in parallel for six months.<\/p>\n
The debtor will choose to settle in up to 72 installments (i.e., three times the 24 installments provided for under the current \u201cstandard\u201d repayment plan and with much smaller monthly payments) for debts incurred up to December 31, 2023, provided, however, that they were not subject to an active payment plan as of April 21, 2026.<\/p>\n
In this context, the application process and calculation of the \u201cpayment plan\u201d are planned to be conducted electronically through the Independent Authority for Public Revenue (AADE) and the Central Electronic Administration Office (KEEO), as soon as the relevant applications are launched for this purpose. The arrangement will take effect and produce results as soon as the first installment is paid; however, specifically for the tax office, must be paid immediately within 3 days of the application submission date.<\/p>\n
However, the arrangement will not be permanent. By law, the deadline for submitting applications will be December 31, 2026. At the same time, any other debts incurred on or after January 1, 2024, must also be settled.<\/p>\n
4) New seizure-exempt limit of 1,600 euros on bank accounts<\/b><\/p>\n
Under another provision, after a decade, the monthly exemption limit for debts to the government is increased to 1,600 euros, up from the 1,250 euros that had been in effect for the past decade. This \u201cfrees up\u201d an additional 350 euros per month (or up to 4,200 euros per year) from the accounts of 1.7 million debtors subject to garnishment.<\/p>\n
At the same time, the corresponding exemption limit for debts owed to private individuals and banks is also being raised: for individual bank accounts, it rises from 1,500 euros to 1,600 euros per month, while it rises from 2,000 to 2,200 euros for joint accounts with more than one beneficiary, ensuring 100\u2013200 euros more in available monthly income, or an additional 1,200 to 2,400 euros per year.<\/p>\n
5) Lifting of Seizures Through Partial Payment<\/b><\/p>\n
In the same vein, another new provision introduces the possibility of fully lifting seizures that have already been imposed on bank accounts, for tax debts.<\/p>\n
The possibility of lifting account attachments for debts confirmed by the tax administration requires that the debtor first pay at least 25% of the debt for which enforcement measures were imposed. In other words, by paying off just one-quarter of their debts, they regain control of their bank accounts so they can receive payments, make payments, or resume normal business operations. This option is permanent and will be activated this summer; however, it is \u201cone-time only\u201d: it is granted as a one-time benefit, just once, to each debtor. If they do not use it properly and forfeit it, they will no longer be entitled to request it again.<\/p>\n
6) Out-of-court mechanism also for small debts<\/b><\/p>\n
The expansion of access to the out-of-court mechanism by lowering the minimum debt threshold for eligibility is also considered a key measure. Under the same law that was passed, the eligibility threshold drops from 10,000 to 5,000 euros, so that more small debtors can take advantage of the mechanism. For those who opt for an out-of-court settlement, up to 240 installments are offered for debts owed to the government or up to 420 for debts owed to financial institutions, with a minimum installment of 50 euros. For example, a debt of 7,000 euros could be paid off in up to 150 installments\u2014more than double the original number. This option is expected to take effect in late July, one month after the law is published in the Government Gazette.<\/p>\n
7) Protection of primary residence in out-of-court settlements<\/b><\/p>\n
For the first time, a new provision is being established to separate and protect the primary residence in out-of-court proceedings, so that the debtor can request special treatment for the home they wish to keep.<\/p>\n
Specifically, under the new provision, a debtor filing for out-of-court debt settlement will be able to \u201cset aside\u201d the primary residence they wish to keep from being liquidated, separate from any other assets they may own. By choosing to offer another property for liquidation (e.g., a plot of land), a more favorable settlement will result, with a larger \u201chaircut\u201d on the debt and smaller installments. In this way, the out-of-court settlement now also serves as a tool for protecting one\u2019s primary residence. This option is expected to take effect in September, three months after the law is published in the Government Gazette.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Ministry of National Economy and Finance is developing a new framework of measures for private debt.
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