The Upcoming Amendments To Greece’s Out-of-Court Debt Settlement Workout: Key Changes Under The Draft Bill Published For Public Consultation

A draft bill published for public consultation on 1 June 2026, which consultation was completed on 15 June 2026, introduces significant amendments to the regulation of debts of both natural and legal persons in general, and, more specifically, to the out-of-court debt settlement mechanism. The most significant of these amendments include, on the one hand, the possibility of repayment and preservation of the debtor’s primary residence, while the debtor’s remaining assets are liquidated, and, on the other hand, the provision that the debt restructuring agreement shall constitute both an enforceable title and a title for the registration of conservatory measures in respect of the claims of the financial institutions covered by that agreement.

Introduction

As we have noted on several occasions, the out-of-court debt settlement mechanism constitutes a constantly evolving instrument for the regulation of debts. Since its introduction by Law 4738/2020, it has undergone a series of amendments through numerous laws and ministerial decisions. The most recent significant amendments took place approximately one year ago, pursuant to Law 5193/2025.

The draft bill entitled “Measures to Address the Energy Crisis and Strengthen Citizens’ Disposable Income, Wage and Tax Provisions, Provisions on the Out-of-Court Debt Settlement Mechanism, Public Sector Pension Provisions, Provisions on the Hellenic Gaming Commission and the Improvement of the Regulatory Framework for Games of Chance, Provisions on the Public Properties Company S.A., and Other Provisions” introduces further amendments to the procedure governing the out-of-court debt settlement mechanism.

The first of these amendments concerns the amount of debt required to be owed by the applicant in order to be eligible for inclusion in the out-of-court debt settlement mechanism, which is reduced from EUR 10,000.00 to EUR 5,000.00. The following two amendments, however, which are analysed in the present article, are of particular significance for both debtors and creditors.

Repayment and Preservation of the Debtor’s Primary Residence through the Out-of-Court Debt Settlement Mechanism

The draft bill introduces a new possibility in cases involving the settlement of debts owed to financial institutions through the out-of-court debt settlement mechanism. In particular, creditors will now be able to submit a proposal consisting in the disposal of all of the debtor’s other immovable assets, excluding the debtor’s primary residence.

At the same time, for the purposes of calculating the monthly instalments under the arrangement, only the value of the primary residence will be taken into account as the value of the debtor’s immovable property. It should be noted that, under the out-of-court mechanism, repayment capacity is defined as the highest of the following amounts: the amount declared by the debtor himself/herself; the amount resulting from the debtor’s income on the basis of his/her tax records; and, finally, the recovery value deriving from the liquidation of his/her assets.

Accordingly, under the proposed provision, the proposal generated by the calculation tool will take into account, as asset value, only the value of the primary residence, thereby leading to more favourable debt settlement arrangements.

Let us consider this by way of a simple example: Assume a low-income debtor whose total asset value amounts to EUR 400,000.00, while the value of his/her primary residence amounts to EUR 150,000.00. Until now, the proposal generated by the calculation tool would provide, over time, for repayment of an amount of at least EUR 400,000.00. Under the proposed provision, it will be possible for an arrangement to be generated providing for the repayment, over time, of an amount of EUR 150,000.00, while the debtor’s remaining immovable property is liquidated.

It is critical to note the following:

1. The submission of the above proposal constitutes, in principle, a possibility available to the creditors/financial institutions, and not an obligation on their part.
2. The above counter-proposal is mandatory only where the debtor falls within the cases provided for in paragraph 3 of Article 14 of Law 4738/2020, namely where the debtor qualifies either as a vulnerable debtor or as an eligible debtor.
3. The value of the primary residence shall be the value recorded in the books of the financial institution holding a mortgage prenotation over it and, where there is also a second financial institution holding a mortgage prenotation, the higher of the two values, reduced by 3%.
4. This arrangement may be effected only once. In the event of default under the debt restructuring agreement entered into, it shall not be permissible to re-settle the amounts that had been settled thereunder by submitting a new application under the out-of-court debt settlement mechanism.
5. The liquidation process in respect of the debtor’s remaining immovable assets — other than the primary residence — shall be carried out, under an expedited procedure, on the basis of the debt restructuring agreement itself as an enforceable title, while the debtor may not exercise the objections provided for under the Greek Code of Civil Procedure seeking the annulment of the enforcement proceedings.
6. Moreover, pursuant to the transitional provisions of the law, debtors are afforded the possibility, within six months from its entry into force, to submit a new application, even if the period of twelve months has not elapsed since the unsuccessful termination, in any manner whatsoever, of any previous out-of-court debt settlement procedure.

The Debt Restructuring Agreement as an Enforceable Title and as a Basis for Registering a Conservatory Attachment and Mortgage Prenotation

An even more significant amendment is introduced by Article 14 of the draft bill to Article 27 of Law 4738/2020, with respect to the effects of the debt restructuring agreement. In particular, it is provided that the debt restructuring agreement shall constitute an enforceable title for all claims owed to financial institutions, both against the debtor and against the guarantors and co-debtors.

At the same time, it is provided that the debt restructuring agreement shall also permit the registration of a conservatory attachment and a mortgage prenotation pursuant to Article 724 para. 1 of the Greek Code of Civil Procedure.

Moreover, pursuant to the express provision of paragraph 2 of Article 14 of the draft bill, these amendments shall also apply to debt restructuring agreements entered into before the entry into force of the law, provided that the default occurs after its entry into force.

Through these amendments, creditors are effectively granted a powerful enforcement tool, as, in the event of default under the debt restructuring agreement, they will no longer be required to obtain a separate enforceable title, such as an order for payment or a court judgment. Accordingly, in such cases, the debtor is deprived of an important stage of protection against the creditor, namely the possibility of lodging objections under Articles 632 and 633 of the Greek Code of Civil Procedure for the annulment of an order for payment, or of raising a defence against the creditor’s lawsuit.

Therefore, in the event of default, the creditor/financial institution will be able to serve the debt restructuring agreement together with a demand for payment and enforcement, and proceed immediately with enforcement acts, including the attachment of the debtor’s movable and immovable assets or claims held by third parties, such as bank accounts. The debtor, of course, retains the available remedies for the annulment of enforcement acts, as is expressly provided in the relevant provision of the draft bill: “Against compulsory enforcement pursued pursuant to this Article, all legal remedies provided for under the applicable legislation shall be available.”

Consequently, by signing the debt restructuring agreement, the debtor grants all creditors covered by that agreement, in the event of default, both an enforceable title and a title for the registration of a conservatory attachment and a mortgage prenotation. In other words, the debtor’s creditors will no longer be required to initiate proceedings for the issuance of an order for payment, as is the case to date where the debtor defaults under an out-of-court debt settlement agreement. This provision also applies to existing agreements concluded under the out-of-court debt settlement mechanism, irrespective of when they were entered into, provided that the default occurs after the entry into force of the law.

It is therefore evident that this provision drastically restricts the debtor’s rights of defence. Until now, a similar possibility existed only in the rare cases of bilateral agreements with banks or servicers implemented through mediation proceedings.

By Way of Conclusion

The overall assessment of the provisions introduced by the draft bill is rather negative from the debtors’ perspective. Although the possibility is indeed introduced for a settlement involving repayment and the preservation of the debtor’s primary residence, this procedure is mandatory only in the limited cases of vulnerable and eligible debtors, while, at the same time, it leads to the swift liquidation of all of the debtor’s remaining assets.

Moreover, where the debtor’s repayment capacity, as determined on the basis of his/her income, is higher than the value of his/her assets, the arrangement is unlikely to offer any real advantage.

However, the most severe blow to debtors’ rights of defence is the elevation of the debt restructuring agreement to the status of an enforceable title and of a title for the registration of the conservatory measures of conservatory attachment and mortgage prenotation. Thus, by signing the agreement, the debtor and the guarantors provide all financial institutions/creditors covered by it with a significant advantage, which, until now, they might have needed several years to obtain.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.