A citizen expressed his satisfaction with the settlement of his debts through the extrajudicial mechanism to Kyriakos Mitsotakisin the presence of the prime minister in the area of ​​Agia Paraskevi.

The citizen approached Mr. Mitsotakis holding the regulation papers in his hands and then he said to him: “so the extrajudicial works…” with the citizen agreeing.

It is noted that more than 12,000 settings for debts to financial institutions and the State for total initial debts of €4.36 billion. have been carried out through the extrajudicial mechanism until December 2023according to data from the General Secretariat of the Financial Sector and Private Debt Management of the Ministry of Development.

In the summary of the last semester it seems that an average of 950 arrangements are approved through the tool each month; while the continued interest is also reflected by the rate of launching new applications on the platform, which exceed 3,500 every month.

Based on the latest progress report there are €18 billion in the extrajudicial mechanism on the way to regulation. Most applications concern citizens with amount of debts ranging from €50,000 – €200,000. From the analysis of the arrangements given, it appears that 45% of the arrangements for debts to financial institutions receive a haircut of more than 30%, while for debts to the State the corresponding percentage of applications that receive a haircut of more than 30% is 33%.

It is worth noting that with the recent law 5072/2023 additional provisions and safeguards of legal security and protection for borrowers are obtained from the State by imposing specific obligations on servicers. At the same time, the supervision mechanisms regarding the operation of the specific companies are strengthened by the Bank of Greece, the Ministry of National Economy and Finance and the General Secretariat of the Financial Sector and Private Debt Management, as well as the Personal Data Protection Authority.

In the same law, additional improvements to the out-of-court mechanism were instituted, initially providing for the automatic and mandatory acceptance of the arrangements by the banks and the State for the vulnerable. In addition, relevant ministerial decisions are awaited algorithm improvement that will bring even higher haircut (up to 28%), 3% fixed interest rate for 3 years for all arrangements, but also utilization of the tool by persons who inherited debts to the State and have been certified against businesses that have closed.

During the last year, the monthly figures of the extrajudicial mechanism have repeatedly recorded record numbers in successful arrangements, application launches and new submissions, data that reflect the dynamics of the specific tool, which is significantly used by debtors and contributes substantially to the management and reduction of private debt.