The law regarding Greek insolvency has recently been modified. Companies that are involved in insolvency proceedings can request in-depth legal assistance on the latest law from our team of insolvency lawyers in Greece; the following article will present some of the mains rules that have been enacted in Greece.
Starting with 2021, Greece applies a new law which takes into consideration the legal framework under which restructuring can be conducted in this country, as well as matters related to pre-insolvency and insolvency. The new law implements well-established international practices, which have proven to be efficient.
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What is the law on Greece insolvency?
The new legislation which regulates matters on pre-insolvency, insolvency and restructuring is the Debt Settlement and Facilitation of a Second Chance. 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.
Under the new regulations, the Greek insolvency proceedings are expected to last a shorter period of time and to make insolvencies more efficient. One of the main aspects that has been modified is the procedures that are implemented during insolvency proceedings. In this sense, it is important to know that 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 issued 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 purpose of this procedure is to increase the transparency of such operations. Another purpose of the e-auction platform is to speed up the procedure through which real estate resulted from insolvency cases are sold.
Another aspect that is regulated under the new law refers to out-of-court and in-court instruments that are created for recovering debts. With regards to the out-of-court procedures, they 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.
This is a new procedure, which replaces the previous law given by the Law No. 4469/2017. The new regulation grants the right to both individuals and companies to apply for extrajudicial settlement in the moment when they are declared insolvent. The law on Greek insolvency is created to establish different legal measures based on the nature of the debt – this refers solely to the value of the liability that one has towards another entity.
Types of insolvency in Greece
The law distinguishes between large-scale insolvent entities and small scale insolvency. For the first category, if we refer to a Greek company that is insolvent, one of the measures to be taken is to sale the respective business or to use the e-auction mechanism for the purpose of paying the accumulated debts.
In the list below, you can find out few important matters regarding the Greek insolvency under the new law. Our team of insolvency lawyers in Greece can offer more information regarding the following matters and you are invited to address to our team in the case in which you need advice or legal representation in insolvency proceedings:
- 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 a maximum of EUR 700,000 in total turnover;
- the new Greek insolvency law is known as the Law No. 4738/2020;
- 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, owning an immovable property with a value of 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.
Please mind that the new law on Greek insolvency became applicable starting with 1 March 2021 for companies operating in this country, while the new insolvency rules applicable to natural persons were enforced starting with 1 June 2021. If you need an extensive presentation on other regulations prescribed by the new law, our team of insolvency lawyers in Greece remain at your disposal, so do not hesitate to contact our law firm in Greece in case in which you need legal advice or legal representation in insolvency matters.
Contact our team if you are interested in any insolvency proceedings applicable in this country. Our lawyers can present the obligations that can appear if you want to buy land in Greece and you end up in an insolvency situation in the relation to your land.
Our attorneys can offer legal representation in any type of insolvency case, so do not hesitate to contact us for legal advice.