Greece: a chance to gradually pay off debts

After the Greek Ministry of the Interior adopted the corresponding bill and published the law in the Official Gazette, it became possible to settle their debts to municipalities with installments of up to 60 payments and preferential terms for vulnerable citizens.

Begins accepting applications for debt regulationand in some cases with exemption from surcharges, interest and fines. The regulation applies to all types of debts of individuals and legal entities to municipalities and municipal enterprises, for example, ΔΕΥΑ.

The advantages of such an agreement are undoubted: citizens will be able to gradually pay off accumulated debts, and local authorities will improve their financial situationhaving received part of the 3.6 billion euros into the treasury – this is precisely the level that the amount of debts to municipalities and ΔΕΥΑ reached.

The settlement covers debts recorded before October 31, 2024. The debtor's application for inclusion in the agreement is submitted to the competent department of the municipality, region or its legal entity before January 31, 2025. Persons who have received the certificate vulnerable debtor (annual income up to 9,600 euros, availability of property and other criteria), will be able to pay off debts with exemption from surcharges, interest and penalties as follows:

• if the debt is paid in one payment, then the exemption is 95%,
• when paying from two to six payments – with an 85% exemption,
• when paying from seven to twelve payments – exemption in the amount of 80%,
• when paying in installments from 13 to 60 payments – exemption in the amount of 75%.

Businesses and individuals not classified as vulnerable debtors may also repay the debt in installments of up to 60 payments, but in this case the exemption from surcharges does not apply.

In all cases, payments are monthly and equal (except for the last one) and cannot be less than 50 euros. The scheme also applies to debts that are still outstanding on the date of application:

• are under administrative or legislative suspension,
• they were subject to a previous agreement or installment plan, but the benefits of the previous agreement were lost and an agreement providing for the return of amounts paid was not included,
• they have not been established because they are subject to judicial challenge at any stage of the proceedings, provided that in the latter case the debtor has waived any remedy or recourse to judicial proceedings.

Payment of the lump sum or first installment is made within three working days from the date on which the debtor became aware of his inclusion in the scheme, otherwise the agreement automatically terminates. Subsequent installments are paid on the last working day of the relevant month without any special notice to the debtor.

In case of delay in payment of an installment payment, the debtor will be charged a monthly surcharge of 5% of the amount of the installment payment, starting from the day following the date on which it was due to be paid.

During the period of the agreement, if the debtor has paid 5% of the regulated debt for a debt amount of up to 5,000 euros or 10% of the regulated debt for a debt amount of more than 5,000 euros, the competent tax office is ordered to lift this freeze and order a re-release in case of delay in payment, although would be one of the payments.

Under the same conditions the adoption of enforcement measures and enforcement proceedings in relation to the movable or immovable property of the debtor are suspended, but if the debtor loses the benefit of the agreement, then the suspended measures continue.

In the event of failure to pay two consecutive payments or a total of three payments, the agreement is terminated and the amounts due, together with written off fines and surcharges, are recalculated.

The Central Union of Municipalities of Greece ΚΕΔΕ calls for the settlement of the debt of municipalities to local authorities by exempting the payment of surcharges at a rate of 100% for everyone, without income criteria, as was the case in previous rules.

The new law also gives the possibility of resorting to out-of-court reconciliation for debts to municipalities and their legal entities exceeding 10,000 euros. In this case, the debt as the amount of claims (initial amount of debt, any fines and surcharges) is certified by the appropriate ΔΟΥwhich now manages it as a public debt, carrying out all the operations defined in the regulations of the relevant law 4738/2020.

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