As of 21 September 2026, the new regulation of the out-of-court mechanism (Law 5313/2026) has come into force, concerning the alleged rescue of the debtor’s primary residence through the liquidation of the rest of their real estate property. Although this is the debtor’s choice, this specific measure, instead of being a favorable arrangement, ultimately works against them, as it essentially grants creditors the right of liquidation at prices determined by themselves, without the debtor being able to control the procedures that follow, E.K.POI.ZO. points out.
More specifically, this regulation gives debtors who own additional properties the possibility to choose the rescue of their primary residence, provided they consent to the disposal of their other properties. The aim is to achieve a reduction of the total debt and arrangements with lower installments, since only the value of the primary residence is taken into account and the creditors are to be satisfied from the liquidation of the rest of their real estate property.
However, debtors who do not own any properties other than their primary residence, even if they are vulnerable or eligible, cannot be included in the new regulation. Thus, this measure automatically excludes from the possibility of retaining the primary residence a large number of debtors, including even those who are in greater need of protection, such as the vulnerable.
In reality, the right to request the liquidation of property in order to achieve an arrangement does not belong to the debtors, but to the creditors themselves (banks, servicers/funds). They are the ones who decide whether they will propose an arrangement to protect the primary residence, as the law does not oblige them to do so, except only in the case where the debtors belong to the category of the vulnerable or eligible.
With the debtor’s acceptance of the restructuring agreement, the creditors immediately acquire an enforceable title, and can proceed with the liquidation of their other properties, which is incorporated as a binding term in the agreement. Particularly critical is the fact that the liquidation of the properties is carried out on the basis of the value determined or approved by the creditors, depriving the debtor of any possibility of judicial correction or challenge of that price.
Moreover, there is no guarantee whatsoever that the arrangement that will result after the liquidation will be sustainable, since the debtor’s income capacity is barely taken into account. Here lies the risk that the debtor may fail to comply with the arrangement, with the result that they lose the protection of the primary residence and the entirety of their debts is revived and becomes immediately overdue and payable. At the same time, they will also have lost the rest of their real estate property.
Although the above procedures can proceed only if the debtor accepts this specific arrangement proposal, the out-of-court mechanism, despite the improvements, remains a tool in which servicers and banks are the stronger party.
It is clear that the new regulation gives priority to liquidation over sustainability. This is because it gives creditors the possibility, through immediate and rapid procedures and at prices determined by themselves, to liquidate the debtor’s remaining properties, without the possibility of judicial review by them at this specific stage. At the same time, it is highly doubtful whether the arrangement that will result will be sustainable and whether the debtor will be able to service the installments in the long term, so as to truly save their primary residence.
E.K.POI.ZO. points out that the new out-of-court mechanism is unable to fulfill its social role, as once again it leaves the debtor unprotected. In order to truly develop into an effective mechanism for saving the primary residence, it should lead to sustainable and realistic arrangements for the debtor, with terms and conditions that make them viable over time.
In addition, it stresses that debtors should be particularly careful in accepting the creditors’ proposal, as the restructuring agreement creates commitments and failure to comply with it leads to loss of the protection of their primary residence.
We remind you that E.K.POI.ZO. and EN.KA. Region of Crete, in the context of implementing the European program IDeAS4Gr (Improving Debt Advice Services for Greeks) – “Improvement of advisory services on over-indebtedness issues”, provide advice on debt settlement for over-indebted households.
We call on consumers who face difficulties in repaying their debts and are seeking a solution to their problem to contact E.K.POI.ZO. and EN.KA. Region of Crete, become members, and receive personalized counseling for the settlement of their debts.