Greece updates debt mechanism to protect primary residences

Greece's Ministry of National Economy and Finance has implemented new updates to the Extrajudicial Debt Settlement Mechanism, effective September 21. The update transforms the mechanism from a simple debt restructuring tool into a protective shield for primary residences.

Under the new rules, debtors who own multiple properties—such as a primary home along with a secondary residence, plot of land, or farm—can now separate their primary residence from the liquidation of their other assets. By consenting to the auction of secondary properties, debtors can protect their main home from foreclosure.

This separation allows the remaining debt to be recalculated based on the value of the protected primary residence, which can lead to larger debt write-offs and lower monthly installments. Kyriakos Pierrakakis stated in Parliament that the mechanism has been upgraded to serve as a tool for protecting the first home. The process is accessible via the platform of the General Secretariat of the Financial Sector and Private Debt Management.