Up to 120 payments on old debts: Greece makes life difficult for debt collectors

Greece At the same time, it expands the installment plan for old debts to 120 payments and introduces new restrictions for collection companies.

Demanding half of the debt in advance, endlessly delaying negotiations, or continuing the auction with the current agreement will become much more difficult.

First, an important clarification: 120 payments are not for all debts

The new government package actually combines two different topics, and it is important not to confuse them.

Installments of up to 120 payments apply to old debts to the tax service and social insurance funds.

Bank loans and debts that have already been transferred to collection companies are not automatically transferred to these 120 payments.

For bank and other private debts, in particular, the following continues to apply: out-of-court settlement mechanismwhere depending on the circumstances, restructuring of up to 240 payments is possible.

The official terms of the new package have been published by the Greek government.

Who can receive 120 payments

The maximum term of the old scheme is increased from 72 to 120 payments.

It will be able to include debts that have become overdue no later than December 31, 2024 and were not in an active settlement scheme as of September 30, 2026.

The minimum amount of one payment is €30.

The application can be submitted until June 30, 2027.

Moreover, citizens who have already entered the old scheme for 72 payments will be able, upon application, to switch to the new one – up to 120 payments.

The interest rate is set at the level of the current constant scheme of 24 payments – 5.84%.

What about debts after January 1, 2025?

New, more recent debts – those arising after January 1, 2025 – are not included in the 120 payment program.

For them, the standard constant scheme remains until 24 payments.

That is, the new measure is intended primarily for accumulated old debts of households and enterprises.

And now about the collectors

Separately, the government announced 16 changes to the private debt system: eight strengthen the rights of debtors, another eight introduce stricter controls over companies managing overdue loans – those who are more often called debt collectors in common parlance.

Official package published Ministry of National Economy and Finance.

Six months for negotiations – and no more

Until now, negotiations on direct restructuring could drag on for months without a clear outcome.

Now specific deadlines are being introduced.

After the debtor submits a complete package of documents, the creditor must within a maximum of three months either offer a viable repayment scheme or explain in writing why it is being refused.

The debtor will have one month to respond, and the entire procedure must be completed no later than six months.

“Bring half of the debt and then we’ll talk” won’t work anymore

One of the most noticeable changes concerns the down payment.

Until now, with a direct agreement, some creditors could demand immediately 30%, 40% and even 50% debt.

Now the ceiling is being installed – no more than 15%.

For comparison: in an out-of-court mechanism the maximum advance is 10%.

Before the auction, you will first have to offer a solution

No later than three months before the auction the creditor will be required to present the debtor not with a formal “pay everything” letter, but with a reasonable and viable settlement scheme.

The calculation must take into account income, assets and the person’s actual ability to pay.

If there are two reasonable restructuring options, the debtor must be presented with both.

And the refusal to regulate the debt will have to be explained in writing.

You pay as agreed – the apartment cannot be sold

Particularly important protection is introduced for those who have already entered into an agreement and are fulfilling it regularly.

While the current restructuring is being serviced normally, the creditor or debt collector will not be able to:

• terminate the agreement;
• issue a collection order;
• begin seizing property;
• continue the auction.

For violation there are very unpleasant consequences for the claimant himself.

The illegal action is declared invalid, the debtor is credited with an amount equal to five monthly paymentsand the term of the agreement is extended for another five months without additional burden.

In addition, an administrative fine is possible from €50,000 to €500,000.

The collector must explain where the amount of debt came from

The debtor receives a directly assigned right to receive full details of the debt free of charge:

• the original contract and its amendments;
• history of all payments;
• method of calculating the interest rate;
• principal balance;
• interest;
• commissions and other charges.

The provision of information is given 45 days.

The most interesting part: if the documents are not provided on time, interest accrual is suspended until the debtor receives complete information.

It will also become more difficult to endlessly inflate the old debt

The government reinstates the protective restriction of Article 39 of the law 3259/2004 without the previous application deadline.

For loans and borrowings overdue for at least 90 days, a limit on the total overdue debt is established.

In other words, the old debt should not increase indefinitely only due to interest, fines and additional charges.

The collectors themselves will also be monitored

Collection companies will be required to annually disclose more information about their finances, managed loan portfolios, collection results and debtor complaints.

Each company will have to provide the Bank of Greece with an annual strategic plan: how much it expects to recover, in what way, at what costs and risks.

An independent annual audit is introduced for portfolios backed by a government guarantee, and sanctions imposed on companies must be published.

And most importantly: a person who has old debts must first determine who exactly he owes. The way is cleared for tax and insurance funds to 120 payments. There is a different mechanism for banks and collectors – but now with much stricter rules for the collectors themselves.

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