Greece caps debt settlement down payments at 15% and tightens rules for loan servicers

New rules and advance payment caps

The Greek government has unveiled a regulatory framework designed to overhaul private debt management and loan servicing operations across the country. Minister of National Economy and Finance Kyriakos Pierrakakis detailed the measures on Wednesday following initial announcements made during a cabinet meeting chaired by the prime minister. The policy establishes clear legal standards for debt settlement procedures, officially ending open-ended restructuring negotiations that previously lacked enforceable timetables. Under the new rules, credit servicing firms are barred from demanding excessive upfront sums from borrowers attempting to settle non-performing obligations. The framework introduces a strict statutory ceiling of 15% on required advance payments, curbing prior industry practices where servicing companies routinely demanded upfront sums reaching 30%, 40%, or even 50% of the total settlement amount.

With the new framework, we put clear rules in the private debt market and real consequences when they are violated.

Legal safeguards and interest freezes

The statutory measures establish robust protections specifically targeted at assisting borrowers who remain compliant with their restructured repayment plans. Under the new regime, debtors who actively keep up with their agreed installments are shielded from aggressive collection measures, including asset seizures and property auctions. The legislation also addresses administrative delays by placing strict information disclosure obligations on loan servicers. Servicing companies must provide borrowers with full accounting records and complete data regarding their liabilities within a mandatory 45-day window. If a loan servicer fails to deliver these comprehensive debt details within the 45-day period, all interest accrual on the borrower's debt is automatically frozen until full documentation is provided.

The logic is simple. The citizen who owes must know what applies and have a settlement proposal so they can repay their debt. And whoever manages this debt must respect the agreement, the citizen, and the law.

Servicer compliance and monetary fines

The reform package tightens state oversight over all debt management firms and loan servicers operating within the Greek financial market. Servicers will be subject to stricter supervisory inspections, enhanced transparency rules, and mandatory compliance requirements when interacting with citizens. To deter violations, the regulatory framework institutes binding legal sanctions and administrative fines that reach up to €500,000 for entities that fail to uphold debtor protections or breach procedural timetables. Pierrakakis emphasized that the primary objective is to balance creditor accountability with realistic repayment terms, ensuring that individuals who are willing to pay their liabilities are treated fairly under predictable legal standards.

We want protection for the consistent debtor. And accountability for whoever violates the rules.