Greece has announced a major update to its debt restructuring framework, offering homeowners a clearer path to protect their primary residence. The move was unveiled by Kyriakos Pierrakakis, who highlighted the potential benefits of the revised extrajudicial mechanism for settling debts.
The new framework allows debtors to separate their main home from other assets, preserving it through a tailored repayment plan even if it requires selling other properties. This approach marks a shift from previous regulations, which considered a debtor’s total assets when calculating settlements.
How the system works
Under the new rules, the settlement proposal will be calculated based solely on the value of the primary residence, rather than the debtor’s total estate. This is expected to result in larger reductions—or “haircuts”—on outstanding debt and lower monthly installments.
The property’s value will be determined using the higher of its market price or official tax value (based on Greece’s ENFIA property tax system). Any additional properties owned by the debtor would be sold through electronic auctions, generating funds to help offset outstanding debt.
Debtors retain the right to accept or reject the proposed settlement. If accepted, a restructuring agreement will be formalized, enabling repayment over time and ensuring the primary home is protected.
Key benefits for homeowners
Officials at the Ministry of Finance emphasize that the process will be streamlined, offering debtors a swift and effective solution. Among the main advantages are:
- Significant reductions in total debt owed
- Lower monthly repayment amounts
- The ability to liquidate otherwise “locked” assets to settle obligations
The measure is designed to provide a meaningful second chance for homeowners seeking financial stability while protecting their primary residence.
