The out-of-court workout mechanism of Law No. 4738/2020, which replaced the previous procedure of Law 4738/2020. 4469/2017, is the main tool available to debtors for the settlement of debts against financial (banks and management companies) and public entities (State, EFKA, while recently with Law no. 5024/2023 also included debts to municipalities). In fact, the changes that took place at the end of 2022 and the beginning of 2023, with the reduction of the interest rates of the settlements, the possibility of discounting the settlement without the obligation to pay interest, as well as the exclusion of settled debts, have made the procedure more attractive for the debtor.
The procedure is implemented through an electronic platform of the Ministry of Finance and the implementation of the relevant institutional framework started from 1.6.2021. As we are extensively involved in resolving insolvency issues, especially for legal entities, the out-of-court mechanism is another weapon in our quiver to achieve viable settlement solutions on behalf of our clients.
Our involvement with the online platform of the out-of-court mechanism starts even before the law was implemented, while the experience we have gained through the applications we have processed in the approximately two years of operation of the platform helps us to deal with every possible issue that arises from the creation to the final submission of the application, and then to the achievement of the debt restructuring agreement.
As part of the out-of-court mechanism process, we provide services covering the whole spectrum of this process up to the achievement of the debt settlement. Indicatively:
- We undertake the complete handling of the online platform from the creation of the application to the completion of the process.
- We collect all the necessary financial data and carry out the necessary verifications with the data automatically obtained through the platform from the creditors.
- We complete the out-of-court application form, while also posting all the legally required documents.
- We contact both the creditors and the representatives of the Special Secretariat for Private Debt Management (SGRM) to resolve any technical or other issue that arises.
- We handle potential correction requests submitted by creditors both at the stage of completing the application and after its final submission.
- We monitor on a daily basis the data and developments of the application in order to intervene and resolve any issue promptly.
- In case the debtor's rights guaranteed by the institutional framework are affected (e.g. suspension of enforcement measures), we propose and undertake the appropriate legal actions to defend the debtor.
- At the level of criminal law, we deal with any criminal prosecutions brought for the offences of non-payment of debts and non-payment of social security contributions.
