Debts to state get written off

The Independent Authority for Public Revenue (AADE) is writing off the debts to the state for about 100,000 debtors who had entered the provisions of the Katseli law.

They are debtors who arranged their debts both to the banks and to the state and achieved debt cancellation, which the state is now called upon to implement. A condition for the forgiving of the debt agreed as part of the settlement is the debtors’ compliance with the terms of debt settlement decided by the courts, which must be certified by a specific procedure.

This is provided for in the circular issued by the head of AADE, Giorgos Pitsilis, issuing instructions to the audit services which should check whether the terms of the relevant regulation have been met. 

The Katseli law, established in 2010 with the outbreak of the financial crisis, had about 200,000 debtors benefiting from its protection. Of these, approximately 150,000 have been adjudicated and over 100,000 have received a positive settlement decision, the vast majority of which had debts to both banks and the state.

According to the law on the discharge of debtors from the remainder of their debts, the repayment timetable must have been followed, specifically the three-year payment of all creditors as it has resulted from the court decision. Specifically, the law stipulates that “the normal servicing by the debtor of the obligations imposed by the decision issued will result in their release from any existing outstanding debt against all creditors, even against those who did not announce their claims. The court at the request of the debtor, which is notified to the creditors, certifies their exemption from the rest of the debts.”

In accordance with the tax authority’s circular, the debts for which a debtor is exempted are not taken into account for granting the debtor a debt clearance certificate, nor are they subject to offsetting with any claims the debtor may have of the state.