Seven major interventions targeting private debt — which currently exceeds €240 billion — are introduced by a new bill from the Ministry of National Economy and Finance, submitted to parliament. The legislation offers a second chance to 1.5 million debtors with overdue debts owed to the tax authority, social security funds, and banks. At the heart of the bill are a new 72-installment repayment plan, a new extension for Swiss franc loan borrowers seeking up to 50% debt reduction, an expanded out-of-court settlement mechanism, the unblocking of frozen bank accounts, and primary residence protection measures for vulnerable debtors.
Read also: When will the 72-installment platform launch and which debts will be eligible
At the same time, the countdown has begun for the new Real Estate Acquisition and Leaseback Agency. This new mechanism targets vulnerable households in financial deadlock who are at risk of losing their primary residence, as they are no longer able to service any debt repayment arrangement.
Here is a detailed breakdown:
- New 72-installment repayment plan: The platform for the new 72-installment settlement plan for debts owed to the tax authority and EFKA (social security) is expected to go live by the end of June. It will allow debtors with overdue obligations confirmed up to December 31, 2023, to enroll. A key condition is that more recent obligations — those arising after January 1, 2024 — must have been paid in full or be part of an active repayment arrangement. The minimum monthly installment is set at €30, and the principal debt carries a fixed annual interest rate of 5.84%.
- Swiss franc loans: The protection program for Swiss franc loan borrowers is extended until September 30, 2026. According to Ministry of National Economy data, approximately 14,000 borrowers have expressed interest and submitted applications to join the program. The arrangement applies to performing or already restructured Swiss franc loans and provides for their conversion to euros at a more favorable exchange rate, a fixed interest rate for the entire repayment period, and the option to extend the loan term by up to five years. The goal is to significantly reduce monthly installments and partially offset the financial burden caused by exchange rate fluctuations in previous years. For borrowers who are current on their payments, three categories of relief are available. The first applies to those who meet specific income, asset, and deposit criteria, offering a 30% exchange rate reduction and an interest rate of 2.50%. The second provides a 20% reduction with a 2.70% interest rate, while those who do not qualify for either of the first two categories receive a 15% exchange rate improvement and a 2.90% interest rate. Even greater benefits are available for financially vulnerable borrowers. This category is eligible for an exchange rate reduction of up to 50% and an interest rate of 2.30%, substantially lowering both the total debt and the monthly payment burden. Non-performing loans are not included in this scheme and continue to be handled through the out-of-court settlement mechanism, which remains the primary restructuring tool for debtors experiencing difficulty in servicing their loan obligations.
- Out-of-court settlement mechanism: The out-of-court settlement mechanism is being expanded to cover debts owed to the state and social security funds. The new framework opens eligibility to debtors with debts exceeding €5,000, broadening access to a tool that previously required a minimum debt threshold of €10,000. Through this mechanism, debts can be repaid in up to 240 monthly installments at a fixed interest rate of 3%. Unlike the 72-installment plan, the out-of-court mechanism takes into account the debtor’s overall financial picture, including income, assets, bank deposits, other liabilities, and actual repayment capacity.
- Lifting of bank account seizures: Taxpayers and businesses with frozen accounts due to overdue debts will be able to unblock them by paying 25% of the total debt and arranging repayment of the remaining balance. This option is available on a one-time basis and aims to maintain a minimum level of liquidity for operational needs, particularly for small and medium-sized enterprises and self-employed professionals.
- Increase in protected account balance threshold: The minimum protected deposit balance in bank accounts — exempt from seizure — is being raised from €1,250 to €1,600 for all debts owed to the state and banks.
- Targeted primary residence protection through the out-of-court mechanism: As of September 21, 2026, the out-of-court settlement mechanism will allow debtors to legally separate their primary residence from the rest of their assets. A debtor may exclude their home from the liquidation process, securing debt reduction, lower monthly installments, and repayment spread over up to 420 installments (up to 35 years), in exchange for the liquidation of their remaining assets.
- Real Estate Acquisition and Leaseback Agency: The Real Estate Acquisition and Leaseback Agency is expected to become operational this autumn. This new mechanism is designed for vulnerable households in financial deadlock who are at risk of losing their primary residence, as they can no longer service any debt settlement arrangement. The Agency will purchase the vulnerable debtor’s primary residence at approximately a 30% discount on its market value and subsequently lease it back to them, allowing them to remain in their home with a subsidized rent. The state subsidy is estimated to range between €70 and €210 per month, and the lease term may extend up to 12 years. At the end of the 12-year period — or earlier, should the debtor’s financial situation improve — the debtor holds the exclusive right to repurchase the property at its current market value (or at 70% of that value, depending on final terms), provided they have been consistent in paying rent.
