Greece implements new primary residence protections via debt settlement mechanism

A new framework for the out-of-court debt settlement mechanism in Greece went into effect on September 21, 2026, introducing enhanced protections for primary residences. Under the new rules, debtors can separate their primary home from other real estate assets. By consenting to the voluntary liquidation of secondary properties, such as holiday homes or plots of land, debtors can achieve greater debt write-offs and lower monthly installments, as the settlement calculation is based solely on the value of the primary residence.

Once a settlement agreement is signed, creditors are prohibited from conducting auctions or forced executions on the primary residence. The mechanism also features a lowered minimum debt threshold, decreasing from €10,000 to €5,000, which allows smaller debtors with obligations to the state, social security funds, or banks to participate.

Repayment terms vary by creditor type, offering up to 240 monthly installments for debts to the state and social security, and up to 420 installments for bank and debt management company debts. For vulnerable and eligible debtors, creditors are required to propose this alternative settlement involving the protection of the primary residence.