Greece's out-of-court debt settlement: application, proposal and key risks

What the mechanism covers

The out-of-court mechanism under Greek Law 4738/2020 is an online process for restructuring debt without initially going to court. It may be available to individuals, self-employed people and businesses owing money to banks or loan servicers, the state or social security bodies. It differs from mediation used to resolve private disputes.

Following the 2026 change, the total owed to creditors covered by the mechanism must exceed €5,000. This is not the only requirement: existing settlements, pending proceedings, co-debtors and guarantors can affect the available options. A complete account of the debt should be prepared before applying.

Prepare the debt and property records

For each creditor, collect the current balance, interest, security, any existing settlement and enforcement documents. Check income, assets and relevant information about co-debtors or guarantors. Incomplete or inaccurate information can affect the assessment.

If a payment order, seizure or auction notice has already been served, preserve the documents and record the dates. A settlement application does not automatically replace other legal steps that may be needed to protect your position.

• A breakdown of debts and creditors
• Income, essential expenses and asset records
• Loan agreements, existing settlements and guarantee documents
• Payment orders, seizure documents and auction dates, where relevant

Application and assessment of a proposal

The debtor or an authorised adviser applies through the platform linked from gov.gr. The platform retrieves and requests information for the assessment. Depending on the creditors involved, a restructuring proposal follows and the debtor decides whether to accept it.

Submitting an application is not approval of a settlement. Before acceptance, review the total repayable amount, instalments, interest, any reduction, security and the consequences of missed payments. Official maximum instalment periods do not mean that every applicant will receive the longest available term.

A scheduled auction and the primary residence

If an auction is scheduled, the exact date and the status of the application are critical. Suspension after final submission has exceptions: according to the Ministry's guidance, it does not cover an auction scheduled within three months of the application. Do not assume that a draft or unsubmitted application will stop the auction; obtain case-specific legal advice promptly.

The Ministry announced an additional primary-residence proposal option effective from 21 September 2026. It separates the primary home from other real estate but involves consenting to the voluntary liquidation of other assets. The consequences for the entire household's property should be assessed before selecting that route and compared with other available options.

Why review the legal position first

Legal review identifies creditors, debts, security and any parallel proceedings. It then assesses whether the proposed arrangement is clear and realistically affordable, including obligations affecting co-debtors and guarantors.

For a case in Heraklion or elsewhere in Crete, an organised file and a timeline make the first consultation more productive. The appropriate next step depends on the documents and dates; neither acceptance into the mechanism nor protection of property is guaranteed.