Out-of-court settlement system to include debts to state

Any enterprises that had expired debts to the banks or the state at the end of 2016 will be able to enter the government’s extrajudicial mechanism for the settlement of arrears and get one last chance to stay in business.

Although several technical details remain to be settled with the country’s creditors, the main points have already been agreed on, including the provision that the mechanism will be able to accept enterprises (including personal ventures) with total debts of 20,000 euros or more. These enterprises will also be able to restructure any debts they run up in 2017 and 2018.

The government and the creditors also deemed it necessary to dictate the electronic clearing of applications that concern debts between 20,000 and 50,000 euros: In order for the online system not to crash, there will be an automatic electronic process that will rule out any applicants which do not fulfill the conditions required, the main one being that the companies are sustainable, with operating profits.

All debts will be entered into the system, including those concerning value-added tax or salary tax, with the exception of social security benefits and third-party levies. It will also be possible for entrepreneurs to enter personal debts (such as a mortgage loan) too.