Greece enacts private debt overhaul with lower court-settlement payments, a 72-instalment tax scheme and higher unseizable bank threshold

A social footprint of the crisis

A new framework for private debt, passed in parliament days ago under Law 5313/26, was put into immediate effect by the Ministry of National Economy and Finance. The package targets more than 2 million households and debtors who carry overdue loans to banks, the tax office and social-security funds, including people still in active court-ordered repayment plans and those who fell behind during the pandemic or the energy crisis.

Private debt is perhaps the most complex social footprint of the crisis. It is measured in insecurity, in postponed life decisions, in people who feel that the past continues to determine their future.

The minister said the goal is to break the vicious cycle with measures that offer real second chances, adding that the success of economic policy is measured by the number of citizens who feel they are regaining control of their lives.

How judicial settlements change

The central intervention recalculates interest on active arrangements under the former Katselis law (Law 3869/2010). Instead of charging interest on the entire outstanding balance, interest will now apply only to the monthly instalment fixed by the court. For a final debt of €144,500 repaid over 25 years at 3.6%, the monthly payment drops from about €731 to about €483.

The rule applies retroactively to all active arrangements not yet completed or forfeited. Overpaid interest that has already been collected will be offset against the remaining instalments, shortening the repayment period. The measure covers more than 100,000 individuals with active judicial plans.

Lock on existing administrative settlements

For debtors who joined administrative or extrajudicial settlements under other laws (such as Laws 4605/2019 and 4738/2020), the agreed monthly instalment is now treated as a final principal-plus-interest payment. No additional charges or recalculations are permitted beyond what the original agreement specifies. This lock applies retroactively from 1 April 2019.

The 72-instalment route for tax and social-security debts

A new extraordinary arrangement allows up to 72 monthly instalments for overdue debts owed to the state and to social-security funds. To be eligible, the debts must have arisen by 31 December 2023 and must not have been under an active repayment plan in April 2026. Applications can be submitted electronically until 31 December 2026.

Higher unseizable limits and a path to lift seizures

The protected monthly bank-account threshold for debts owed to the state rises from €1,250 to €1,600. For debts to private creditors and banks the limit is set at €1,600 for individual accounts and €2,200 for joint accounts. Additionally, a debtor can request the lifting of a bank-account seizure once, provided at least 25% of the underlying debt has been repaid.

Widening the extrajudicial mechanism

The minimum debt threshold for entering the out-of-court settlement mechanism is lowered from €10,000 to €5,000, opening the process to more small debtors. The mechanism also now offers the possibility of protecting a primary residence from auction.