Greece implements new debt restructuring and residence protection rules

New regulations for debt restructuring in Greece are set to take effect on September 21, 2026, significantly altering the extrajudicial mechanism for debtors facing obligations to the state, social security funds, banks, and servicers.

A key feature of the new rules is the protection of the primary residence. Debtors can now choose to separate their main home from their remaining assets. This allows for a potential reduction in debt and lower monthly installments, calculated based on the home's value relative to the total debt. In exchange, other assets may be liquidated through electronic auctions.

For debts owed to the tax authorities and social security funds, existing options include a 24-installment plan for regular debts and up to 48 installments for extraordinary debts. Additionally, a 72-installment option remains available until December 31 for specific older debts that were overdue by the end of 2023.

The scale of the issue is substantial, with tax debts estimated at 114 billion euros, social security debts at approximately 52.4 billion euros, and debts managed by servicers reaching roughly 80 billion euros.