Out-of-court debt scheme moving slowly

The process for companies to sign up for the out-of-court debt settlement scheme after the recent launch of the online platform allowing firms to apply has proved difficult and time-consuming.

To date, 15 applications have been completed, which means the firms have submitted all the necessary details and are eligible for inclusion in the out-of-court settlement process concerning their debts to the state and Greek banks.

According to the Special Secretariat for Private Debt Management, between August 3 and 11, around 5,000 companies visited the newly launched website and submitted their details.

Of these, 1,350 tried to progress to the second stage, which is where it is decided whether they fulfill the necessary criteria. During this phase, 800 applications were rejected, while it was deemed that the other 550 could pass to the next round, when they are required to provide details of their debts and the necessary documents so they can be accepted into the out-of-court process.

This decision is made by a “coordinator,” who assists in the process so the business can reach an agreement with its creditors on how to pay its debt without the matter needing to be referred to court or the company having to be declared bankrupt or shut down.

The conditions that the businesses must fulfill include having loans that are overdue by at least 90 days, having overdue debts to tax offices, social security funds or local authorities and that the total money they owe amounts to more than 20,000 euros.

The out-of-court settlement process is also open to a range of individuals, apart from companies. These include some farmers and self-employed professionals. Those not eligible can still apply to be included in the payment plans offered by the state and social security funds for unpaid taxes and contributions. This allows them to settle their debts over several months.