Tomorrow, Monday, 27 July 2026, the electronic platform for applications to Greece’s new out-of-court debt settlement mechanism will go live. The initiative enables a broader range of debtors to restructure their obligations to the state (the Independent Authority for Public Revenue — IAPEP, formerly known as the Tax Office — and the Social Insurance Fund EFKA), banks, and loan servicers under highly favourable terms.
Lower Entry Threshold, Wider Access
A key change is the reduction of the minimum debt threshold required for eligibility: debts totalling €5,000 or more now qualify — down from the previous €10,000 limit. This expansion is expected to bring up to one million additional debtors into the scheme, offering much-needed relief especially to low- and medium-income individuals struggling with multiple liabilities.
Flexible Repayment Terms
Under the new mechanism:
- Tax and social security debts (to IAPEP and EFKA) can be repaid in up to 240 monthly installments.
- Debts owed to banks and loan servicers may be spread over up to 420 monthly installments.
- Minimum monthly payment is set at €50.
- The interest rate is fixed at 3% for the entire duration of the plan.
Debt Reduction and Sustainability Assessment
The process is fully digital. Applicants must submit detailed information on their income, assets, and financial obligations. Based on this data, the system automatically calculates a tailored repayment proposal — including installment amount and duration. Crucially, under certain conditions, part of the principal debt may be written off if deemed necessary to ensure the long-term sustainability of the arrangement. Such decisions are based on a holistic assessment of the debtor’s financial capacity — including income, assets, and overall economic situation.
Transparency Requirements
To participate, applicants must consent to the lifting of tax and banking confidentiality. This allows all creditors involved — public authorities, banks, and servicers — to access a complete and transparent view of the debtor’s financial profile. This level of transparency distinguishes the out-of-court mechanism from other existing arrangements, such as the recently launched 72-installment plan.
How It Differs from the 72-Installment Plan
While both schemes aim to ease debt burdens, they differ significantly:
- The 72-installment plan, activated last Saturday (18 July 2026), applies only to debts owed to IAPEP and EFKA.
- The out-of-court mechanism covers debts to IAPEP, EFKA, banks, and loan servicers — making it a comprehensive, multi-creditor solution.
- It offers substantially longer repayment periods — up to 420 months — and includes the possibility of principal debt reduction, features not available under the 72-installment framework.