Legal insight
October 2025
Danae Stamarga, LL.M.
Summary: In this article we examine which debts appear to constitute exceptions to the rule of discharge in bankruptcy. In other words, which debts the bankrupt does not shed even after the lapse of three years (or, subject to conditions, one year in the case of bankruptcy) from the declaration of bankruptcy or, for a non-adjudicated debtor, from the entry of his name in the electronic insolvency register.
1. Introduction
As we have noted in another article (see here), one of the core pillars of the new bankruptcy law is the discharge of natural persons from their debts. This discharge is provided in Arts. 192 et seq. of Law 4738/2020 and, on that basis, an individual debtor is fully discharged from all debts to bankruptcy creditors, whether or not they have been filed, thirty-six (36) months (or, subject to conditions, within one year) from the date of the bankruptcy declaration or the entry of his name in the electronic insolvency register (ΗΜΦ), unless within the above period an appeal is lodged by any party with a legitimate interest against the discharge.
In parallel, under the same conditions, Art. 195 of Law 4738/2020 provides for the discharge of the representative of a legal person from any liability for the debts of the debtor legal person. In this way, a genuine second chance is afforded to over-indebted individuals, together with an incentive to work and rebuild assets. However, Art. 194 of the same Law lays down certain cases that are not covered by the above discharge; these are set out immediately below.
2. Debts excluded from discharge
On the basis of the foregoing, discharge arises ipso jure in principle for every debt of the bankrupt debtor. This means it occurs without any action being required from the debtor (such as an application to the bankruptcy court) or the issuance of a decision. In practice, however, the bankrupt commonly files an application seeking a declaratory act of discharge from the competent bankruptcy court (see Art. 192 of Law 4738/2020). The bankrupt can then notify that act to the bankruptcy creditors so that they are informed—also in this formal manner—of the discharge that has already occurred automatically, and therefore refrain from further attempts to collect claims from which the bankrupt has been discharged.
However, under Art. 194(1) of Law 4738/2020—which applies automatically, i.e., without the need for an appeal or a court decision—the bankrupt is not discharged from:
(a) Debts arising after the filing of the bankruptcy petition. In the case of debts owed to the State, the decisive time is when the obligation accrues, not when the enforceable title is created, since tax audits may be delayed or lengthy.
(b) Debts arising from intent or gross negligence causing death or bodily injury. This category includes compensation (including for non-pecuniary damage or mental anguish) related to causing death or bodily injury.
(c) Debts arising from the offences under Law 4557/2018 (Government Gazette A 139) on the prevention and suppression of money-laundering and terrorist financing, excluding the offence of non-payment of debts to the State.
Article 4 of that Law contains an extensive list of predicate offences covered by its provisions. By reference to that article, examples of debts excluded from discharge—because the bankruptcy law cross-refers to Law 4557/2018—would include debts arising from acts such as: formation or participation in a criminal organisation (Art. 187 PC), terrorist offences (Arts. 187A, 187B PC and Arts. 32–35 of Law 4689/2020), bribery/corruption of political or judicial officials (Arts. 159, 159A, 237 PC), bribery of public officials (Arts. 235, 236 PC), trading in influence / private-sector bribery (Arts. 237A, 396 PC) or match-fixing bribery (Art. 132 of Law 2725/1999), telecommunications offences (as listed in Art. 4 Law 4557/2018), computer fraud (Art. 386A PC), smuggling (Art. 174 Law 5222/2025), securities-law crimes (Arts. 28–31 Law 4443/2016), theft (Art. 372 PC), embezzlement (Art. 375 PC), robbery (Art. 380 PC), tax evasion (Art. 79 Law 5104/2024), and other offences referred to in Art. 4 of Law 4557/2018.
Note that Art. 194 of Law 4738/2020 expressly excludes the offence of non-payment of debts to the State from the carve-out. Although this offence is listed as a predicate offence in point (k) of Art. 4 Law 4557/2018 on money-laundering, the bankruptcy legislator explicitly exempts it for purposes of Art. 194. Thus, after discharge takes effect, the bankrupt does not owe the State amounts arising from the offence of non-payment of debts to the State—provided, of course, those debts are not connected with amounts originating from the commission of some other offence (e.g., tax evasion), for which, as noted above, discharge does not apply. It should also be noted—again as mentioned above—that for non-payment of debts to the State the decisive time for the arising of the obligation is when the obligation accrues, not when the enforceable title is created.
At this point it is worth addressing the issue arising from Art. 194’s reference to the offences in Law 4557/2018, and especially to Art. 4(kα) of that Law. Point (kα) provides that a predicate offence within the scope of the Law—i.e., an offence capable of generating proceeds that may then be laundered—also includes “any other crime punishable by a custodial sentence with a minimum exceeding three (3) months, from which a pecuniary benefit arises.” In this way, the legislator further broadens an already broad list of offences that can constitute predicate offences for money-laundering. Because the bankruptcy legislator has referred to the offences in that Law, it could be argued that the bankrupt is not discharged even from debts arising from criminal acts of a misdemeanour character, provided the minimum custodial sentence exceeds three months.
(d) Maintenance (alimony) obligations. This category includes debts arising against the bankrupt in the context of private-law family disputes, such as spousal maintenance while separated (Arts. 1391–1392 CC), post-marital maintenance (Arts. 1442 et seq. CC), and maintenance of minor and adult children (Arts. 1485 et seq. CC).
3. Possible disputes concerning discharge of a specific debt
The above exceptions to the discharge of the bankrupt debtor apply ipso jure under the conditions set out and, as already mentioned, no appeal need be lodged and no court decision issued in order for those debts to continue to burden the debtor. However, if a judicial dispute arises—for example, if in a given case it is disputed whether bodily injury was caused by intent or gross negligence—that dispute will be resolved by the competent court under the procedural rules applicable to the dispute from which the debt arose, not by the bankruptcy court.
As regards all of the foregoing cases of criminal offences giving rise to debts from which the bankrupt is ultimately not discharged under the provision under consideration, note that there must be an irrevocable criminal conviction of the bankrupt for the specific offence from which the debt arose.
Accordingly, if we assume there is a debt from tax evasion and an individual late-payment notice has been issued in respect of it, the bankrupt debtor may file an objection against that notice, arguing that he has been discharged through bankruptcy. In such a case the administrative court will hold that the debt is not covered by the discharge because it falls within the exceptions of Art. 194. Further delays may arise in the administrative-court proceedings if parallel criminal proceedings are pending regarding the alleged predicate offence.
4. In lieu of a conclusion
To summarise, in most cases the debts from which a bankrupt debtor is not discharged—even after three years from the bankruptcy declaration or the entry of his name in the Electronic Insolvency Register—are either debts relating to the period after the filing of the bankruptcy petition, or debts relating to the support of close family members, or debts the bankrupt himself caused by intent or gross negligence, e.g., through the commission of a criminal offence (misdemeanour or felony) that also gives rise to a civil claim. It may therefore be said that it is logical for these specific debts to be excluded from discharge, while the remaining debts—those not caused by the debtor’s fault—no longer burden him, thereby affording him a genuine second chance to develop healthy entrepreneurial activity and recover financially.
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