The electronic platform of the new out-of-court debt settlement mechanism is officially launching today, giving citizens and businesses the opportunity to enter a more favorable framework for restructuring their debts. The most significant change is the lowering of the minimum debt threshold for eligibility, as total debts exceeding €5,000 can now be included — down from the previous threshold of €10,000.
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According to estimates, this improvement opens the door for approximately one million additional debtors, who will now be able to take advantage of the favorable terms offered by the new mechanism. The lower eligibility threshold is expected to be a major relief — particularly for small debtors — allowing them to settle their obligations through multiple equal monthly installments, with a minimum payment of just €50.
New out-of-court mechanism: Up to 420 installments, fixed 3% interest rate, and debt write-off option
The new out-of-court settlement mechanism allows debts owed to the Tax Authority and the Social Security Fund (EFKA) to be restructured into up to 240 installments, while debts owed to banks and loan servicers can be spread over up to 420 installments. The entire process is conducted electronically at every stage, during which the debtor provides a detailed declaration of their income, assets, and financial obligations. Based on the calculations subsequently performed by the mechanism, a settlement proposal is generated — specifying the amount and number of installments. Under certain conditions, a partial write-off of the principal debt is also possible if deemed necessary to ensure the “viability” of the arrangement. In other words, the debtor’s income, assets, and overall financial capacity are taken into account when determining whether a debt write-off is warranted. The settlement interest rate is set at a fixed 3% for the entire duration of the arrangement.
Throughout the application process, the debtor is required to submit detailed financial information along with all necessary supporting documents. They must also consent to the waiver of tax and banking secrecy, allowing all creditors to obtain a clear and complete picture of their financial situation. This is one of the key differences between the out-of-court mechanism and the 72-installment arrangement, which was already activated last Saturday and has already shown strong uptake.
Both arrangements aim to help debtors settle their obligations under favorable terms. Although both target debtors, there are significant differences between them. The main ones are:
The 72-installment arrangement applies to debtors with debts owed to the Tax Authority and EFKA. The out-of-court mechanism applies to debtors with debts not only to the Tax Authority and social security funds, but also to banks and loan servicers.
The out-of-court mechanism offers significantly more monthly installments for repayment compared to the 72-installment arrangement — potentially reaching 240 or 420, depending on the debtor’s profile and the category of debts.
The out-of-court mechanism also allows for a write-off of the principal debt, depending on the debtor’s financial situation — something that is not included in the 72-installment arrangement.
Under the 72-installment arrangement, debtors know the terms of the settlement — such as the number of installments — in advance. In contrast, under the out-of-court mechanism, these terms are determined only after the debtor’s financial data has been assessed by the mechanism’s algorithm.
The 72-installment arrangement for Tax Authority debts covers obligations that became overdue by December 31, 2023, had not been settled by April 21, 2026, and remain outstanding as of the date the application is submitted. A prerequisite is that any debts certified from January 1, 2024 onward must have already been paid in full or restructured under the standard settlement scheme.
