You are viewing post The “Extrajudicial Debt Settlement Mechanism”
The “Extrajudicial Debt Settlement Mechanism” (L.4469 / 2017), published in May in the Government Gazette, has come to fill a large legislative gap, giving many debtors significant incentives to join the provisions of this Law with the aim of reducing debts to Banks, Public and Private sector.
Its purpose is to ensure the sustainability of businesses. More precisely, according to Articles 21 and 47 of the Income Tax Code (Law 4172/2013, A ‘167), any natural person with insolvency capacity, as well as any legal entity whose income is acquired by business activity. In the latter case, the incumbents are divided into two categories. On the one hand, in the “big” ones, that, prior to the filing of the application had a turnover of more than 2,500,000 euro or had liabilities of over 2,000,000 euros and on the other hand, in the “small” where they included those having turnover of up to € 2,500,000 or obligations of 2,000. 000 euro.
In any case, among the necessary requirements, is the fact that the minimum amount of debt must be 20,000 euros and the tax residence to be in Greece. In addition, it is necessary that, on 31st December 2016, the amount owed to a financial institution through a loan or mortgage, must have a delay of at least 3 months. Additionally, the debtor will proceed electronically to the Special Secretariat for the Management of Private Debt by December 31, 2018.
In this application, the proposed plan for settling the company’s debts, together with full financial data, must be included. Upon filing the application, those who owe more than € 50,000 are appointed with a process coordinator who controls and supervises the application. By way of exception, the debts written off are the contributions of employees to social security institutions. Finally, the activation process of the online platform has begun with over 2,500 applications registered since the first day