Thessaloniki · 12 Leontos Sofou St.
Out-of-Court Debt Settlement Mechanism for Banks, Funds and the State
Law 4738/2020 · Many instalments · Possible write-off · Asset protection
The out-of-court mechanism is not a simple online application. It is a negotiation with rules, limits and strict deadlines, where the outcome is decided by preparation. Through it you can settle, in a single procedure, debts to banks, claims-management companies (funds), the tax authority (AADE), social-security funds and municipalities. Ioannis Papaioannou, Legal Counsel of the Association of Borrowers and Consumer Protection of Northern Greece, has handled debt-settlement cases against banks and funds for more than 25 years. Rather than just filing an application, we build a file that holds and pursues the best possible settlement, as well as a write-off of part of the debt where the data allow.
What the Out-of-Court Mechanism Is
It is the statutory mechanism of Law 4738/2020 for the comprehensive settlement of debts of individuals and businesses to multiple creditors at once. It operates through an electronic platform and allows repayment over a large number of monthly instalments, while in suitable cases it also provides for a write-off of part of the principal debt, interest and penalties. Inclusion is neither self-evident nor automatic, as it depends on the conditions of the law, on the viability of the settlement and on how the file is presented.
How we help you through the process
- Checking the eligibility conditions before submission
- Full mapping of debts to banks, funds and the State
- Preparing and submitting the application on the electronic platform
- Negotiating the terms of the settlement with creditors
- Pursuing a debt write-off (haircut) where the data allow
- Reviewing the settlement proposal before acceptance
- Combining with an objection or suspension where enforcement is pending
- Monitoring compliance and protection from enforcement measures
Conditions and Critical Points We Check First
Which debts enter the settlement
We check which of your debts can be included, whether to banks, management companies, the tax authority, social-security funds or municipalities, and which may be excluded. The picture must be complete before anything starts, because an incomplete mapping costs you in the settlement.
Viability of the settlement
The proposal the mechanism produces is based on income, asset value and the level of debt. We assess in advance what settlement is realistically achievable, so you are not driven into instalments that do not hold over time.
Grounds for exclusion
There are cases that prevent or limit inclusion, such as a pending bankruptcy, criminal convictions for specific offences or a previous breach of settlement. We check these from the start, so no time is lost on a dead-end road.
Protection from foreclosure
Submission and progress of the application may trigger protection against enforcement measures, under conditions. Where a payment order, seizure or auction is pending, the out-of-court mechanism is combined with targeted procedural moves.
Before you submit an application, check whether it pays off.
We assess the conditions, the debts and a realistic outcome and tell you whether the out-of-court route is the right one or whether a better option exists.
Immediate File ReviewThe Stages of the Process
Before the application
Checking and preparing the file
We record all debts, check the eligibility conditions and grounds for exclusion and gather the necessary information. At this stage it is decided whether the out-of-court mechanism is the right solution and with what goals we will move.
Submission
Filing the application on the platform
The application is submitted electronically, with a waiver of tax and bank confidentiality for the required data. From here the process begins and, under conditions, protection against enforcement measures is activated.
Negotiation
Settlement proposal from the creditors
The mechanism produces a proposal based on a specific calculation. This is where the substance is decided: we check whether the proposal is correct and viable, negotiate terms and pursue, where feasible, a write-off of part of the debt.
Acceptance & compliance
Settlement agreement
On acceptance the settlement is signed and repayment begins in the agreed instalments. Compliance is critical, as a breach can annul the settlement and bring back enforcement. We monitor so that protection is not lost on a technicality.
The out-of-court mechanism does not, on its own, stop a running enforcement
If there is already a payment order, a seizure or a scheduled auction, the defence deadlines run independently. The out-of-court application must be coordinated with the procedural moves, otherwise protection may come too late.
Why us
- 25+ years in debt settlements and banking disputes.
- We do not file a standard application, but build a strategy aimed at the best possible settlement.
- Full knowledge of the practice of banks, funds and claims-management companies.
- Pursuit of a debt write-off where the data of the case support it.
- Combining the out-of-court mechanism with objection and suspension where enforcement is pending.
- Office in Thessaloniki, cases across Greece.
Frequently Asked Questions about the Out-of-Court Mechanism
Debts to banks and claims-management companies (funds), to the tax authority (AADE), to social-security funds (e.g. e-EFKA) and to municipalities. The key advantage is that all of these can be addressed in a single procedure, instead of separate negotiations with each one. Exactly which of your debts are included and which may be excluded is something we check in the first assessment of the file.
Inclusion depends on the profile of the debts, their relationship to your assets and income, and the absence of grounds for exclusion. It is not enough simply to owe money, since your case must meet the criteria of the law and the proposed settlement must be viable. That is why the conditions are checked before submission, so as not to start a procedure that leads to a dead end or an unfavourable proposal.
The law provides for repayment over a large number of monthly instalments, with the exact number differing depending on the creditor, with one figure for the State and social-security funds and another for banks and management companies. The final number of instalments and the amount of each one result from the mechanism's calculation based on income, asset value and the level of debt. Our aim is a settlement that genuinely holds over time.
Yes, in suitable cases a write-off of part of the principal debt, interest and penalties is provided for. The write-off is neither automatic nor guaranteed, as it results from the calculation and from the data of the case. The better documented the file, the stronger your position in pursuing better terms.
The application may trigger protection against enforcement measures, under conditions, but it does not by itself cancel the defence deadlines already running. If a payment order, seizure or auction is pending, the out-of-court mechanism must be coordinated with an objection or a suspension application. That is why the file is assessed as a whole and immediately, before a deadline becomes a missed opportunity.
The out-of-court mechanism is won mainly in the preparation, not in the mere submission of the application.
We check the conditions, the debts and a realistic outcome and tell you honestly what your position is, based on real data rather than promises.
Immediate File Review