Our insolvency lawyers in Greece can assist individuals and companies that need to resolve different insolvency cases in this country. You can rely on us for professional legal assistance.
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What does insolvency mean?
Insolvency is the term used when an entity is no longer able to meet its financial obligations and it isn’t able to pay its debts. In this case, businesses must search for suitable options to meet their financial obligations, such as restructuring or finding suitable repayment options that are acceptable to the creditors. Our insolvency lawyers in Greece can offer in-depth information on these procedures.
Who can become insolvent in Greece?
Insolvency can be declared for:
- individual;
- company;
- partnership.
What is the law on Greek insolvency?
Insolvency in Greece is regulated under the new Insolvency Code (Law 4738/2020), which came into force in March 2021.
What does the Insolvency Code regulate?
The new legislation regulates matters on pre-insolvency, insolvency and restructuring. The law prescribes more efficient procedures regarding both personal and corporate insolvency. It also adopted the EU’s procedures and the purpose of the new law is to create a better environment for such legal actions.
What are the advantages of the new law?
In the list below, our insolvency lawyers in Greece mention some of the main advantages of the new legislation regulating insolvency cases:
- under the new regulations, the Greek insolvency proceedings are expected to last a shorter period of time and to make insolvencies more efficient;
- the new law implemented a central electronic system regarding the registration of insolvencies, which can be used by all parties that are involved in the insolvency process;
- the system is also used for publishing various documents that were issued by the court, related to the court judgments for each insolvency case;
- in the case of Greek insolvency where auctions must be held, the system is also done through an e-auction platform;
- the out-of-court procedures will be done following the rules of the Out-of-Court Debt Settlement Mechanism, which can be detailed by our team of insolvency lawyers in Greece.
What are the main types of insolvencies in Greece?
The law distinguishes between large-scale insolvent entities and small scale insolvency.
What are some of the highlights of Greek insolvency rules?
- small scale insolvency is defined under the rules of the Article 2, Law No. 4308/2014;
- the above refers to entities that have assets with a value of maximum EUR 350,000 or maximum of EUR 700,000 in total turnover;
- the new law introduced new regulations for the primary regime of a debtor who is considered vulnerable – this refers to persons with an income of up to EUR 21,000 per year, owning an immovable property with a value of maximum EUR 180,000 or movable assets with a value of EUR 21,000;
- a debtor can be discharged of debt in a period of 3 years since the moment when the declaration of insolvency was made, or in 5 years, but the latter is applicable in special situations.
Who can complete the insolvency procedures in Greece?
Insolvency cases must be handled by insolvency practitioners.
Who can be an insolvency practitioner in Greece?
Only qualified individuals/ companies can act as insolvency practitioners. Under the new law, a qualified entity can be:
- natural persons who are specialized in accounting, law or audit, who have received the necessary certification in the field;
- companies can also qualify as insolvency practitioners (they can be law firms, such as our law firm in Greece, auditing companies, consulting companies).
Insolvency practitioners are divided into two main categories – Category A can handle all types of insolvency cases for companies, and Category B can only be appointed in proceedings for very small entities.
Can I appoint foreign insolvency practitioners?
In Greek-based insolvency cases, you can only appoint Greek practitioners. The current law does not regulate a procedure through which foreign specialists, including those from EU member states, can be appointed to resolve insolvency cases that fall under the jurisdiction of the Greek insolvency law.
Can the director of an insolvent company have any liability concerning its debts?
Yes. The director of a Greek insolvent company can become liable towards the debts of the company, in accordance with the stipulations of Article 127 of the Insolvency Code. Our insolvency lawyers in Greece can present the cases in which director’s liability can appear.
Do do not hesitate to contact our law firm in Greece in case you need legal advice or legal representation in insolvency matters.