How debtors are rescued in 5 steps

 The extrajudicial mechanism is friendlier: How debtors are rescued in 5 steps

The process for rescuing debtors through the extrajudicial mechanism can be summarized in five basic steps.

Debt settlement is becoming easier, more accessible and fairer for Greek households and businesses through the electronic platform of the Extrajudicial Mechanism.

The new Extrajudicial Debt Algorithm has offered real solutions, putting "in order" (with up to 420 installments or a "haircut" of up to 90%) total debts of over 15 billion euros so far.

In October, a new record of successful arrangements was recorded (2,440 in one month) for debts of over 600 million euros. Now 8 out of 10 arrangements produced by the platform are immediately accepted by banks and funds (82% approval rate in October according to data from the Private Debt Secretariat of the Ministry of National Economy and Finance). While, in total, in all the years of operation of the institution, over 46,000 debtors have arranged in 200 installments on average (16-17 years average repayment period) the debts they had with the public sector, banks or private creditors. In addition, one in two of those who owe to financial institutions achieved a debt cancellation of over 30%, while the average "haircut" towards the public sector was 17%.

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However, despite institutional support and technical improvements, the use of the platform is not considered particularly friendly for "non-specialist" users - debtors , discouraging many beneficiaries from using it, or forcing others to contact consulting firms, instead of completing the applications themselves.

The worst thing, however, was that many, even after reaching "the source to drink water" by achieving the long-awaited regulation (possibly paying several hundred euros to "experts" to complete their applications), still lost their account and installment payments, resulting in the loss of the regulation and the revival of the debts in their entirety - as well as the seizure measures from which they had escaped.

However, after recent upgrades by the AADE, the process is significantly simplified. By integrating new digital procedures and settings into the myAADE platform, the Independent Authority of Public Revenue facilitates access, updating and monitoring of settings by debtors, especially for those who were not familiar with the multiple "screens" and tabs that need to be completed.

What is changing in the process now?

From 9/10/2025, tax debt settlements concluded through the Extrajudicial Settlement System appear automatically and the debtor is informed immediately, in myAADE, under "My Account (Debts, Payments & Refunds) > Debts in Settlement and Payment".

Installment payments are made with the same Debt Settlement Identity (DSI) throughout the duration of the settlement, via e-Banking, mobile Banking, ATM or bank branch, by selecting “Confirmed Debts to the Tax Office”. Although payment is currently not allowed through the myAADE digital environment, the system is automatically informed of the progress of the settlement from payments made based on the Debt Settlement Identity.

In bilateral arrangements with the State, the arrangement is activated and appears after the payment of the first installment, while in multilateral (i.e. "all-in-one" arrangements for debts to both the State and to banks or individuals, etc.) these appear immediately after the successful completion of the application.

For arrangements that had already been made before October 9, 2025, their gradual integration into the same digital environment for unified monitoring is underway.

The 5 steps for "haircut" and installments

New monitoring and payment capabilities make it easier to maintain sustainable arrangements, especially when the “haircut” and installment duration are explicitly linked to asset value and surplus income.

The procedure for rescuing debtors through the extrajudicial mechanism can be summarized in five basic steps, as defined by Law 4738/2020.

1. Property control and the right to a haircut

Debtors must verify the market value of their assets and guarantors, as the amount of debt forgiveness depends on whether the debt is greater than the value of the assets. If the debt exceeds the value, the excess amount can be forgiven (up to 90%).

2. Digital declaration and information

Through the Extrajudicial Platform and myAADE, the information is automatically filled in and debtors are informed about the procedures, rights and deadlines.

3. Personal communication

After submitting the application, debtors receive a message in their personal mailbox with the necessary information for the payment of the first installment.

4. Complete the setup

For bilateral arrangements with the public sector, the arrangement is activated after the first installment is paid. In multilateral arrangements, the display is made upon successful completion of the application.

5. Payment of installments via e-Banking or bank branches

Payment is made with the Regulated Debt Identity (TRO), via internet banking, physical bank branches or ATMs, with the option "Confirmed Debts to the Tax Office".

With these procedures, and after the new changes:

The setup process is fully digital, simpler, faster and more transparent.

Debtors are assisted in avoiding the complete loss of their property, with the prospect of a debt “haircut”.

The arrangements are adapted to the actual capacity of the borrowers and can be extended up to 35 years for mortgage loans (420 installments).

Social care covers vulnerable households and people with disabilities as a priority, with express arrangements that are mandatory for creditors, as well as the provision of a subsidy for the repurchase of the first home.

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