The debt settlement process to municipalities through the extrajudicial mechanism has officially commenced, following a new decision by the Ministries of National Economy, Interior, and the Independent Authority for Public Revenue (AADE).

This settlement currently stands as the sole open option for individuals with debts exceeding €10,000 to local governments (OTAs) or their legal entities. The procedure is initiated exclusively by the debtor and involves specific steps and strict deadlines.

The first step requires the debtor to apply to the municipality or its legal entity to certify the debt and transfer it to AADE’s receivables ledger. Without this certification, the process cannot proceed. Upon completion of registration with AADE, a three-month deadline commences, during which the debtor must submit an application to the extrajudicial mechanism via the platform of the Special Secretariat for Private Debt Management. In this application, the debtor explicitly indicates the desire to include municipal debts.

The procedure is entirely digital. Confirmed debts are automatically retrieved from the platform via the Interoperability Center and presented separately as principal and surcharges. This is followed by an analysis of the debtor’s profile and the development of a repayment proposal, potentially extending up to 240 installments for debts owed to the state and municipalities.

Repayment takes place with a fixed interest rate, with the possibility of waiving surcharges being considered on a case-by-case basis.

Eligibility strictly concerns debts exceeding €10,000 per municipality or legal entity, including surcharges. Debts below this threshold cannot be included. Additionally, debts already expired or set to expire within a year, and those against which municipalities have taken compulsory collection measures (e.g., mortgages), are excluded. Previously included debts, even if prior arrangements have lapsed, are also excluded.

If the application is not completed within three months or if no restructuring agreement is reached, AADE automatically informs the municipality of the outstanding debt, which reverts to municipal jurisdiction and can be pursued through all legal means, including seizures.

Debtors must contact their municipality or relevant legal entity to request certification of their debt with AADE. Once certification is complete, they have a three-month window to file an application through the extrajudicial mechanism on the Special Secretariat’s platform. When applying, debtors must indicate the desire to include municipal debts. Provided criteria are met, a settlement proposal follows, allowing up to 240 installments with possible surcharge waivers. If deadlines are missed or the process fails, the debt returns to municipal authority, allowing compulsory collection measures.

Currently, there is no alternative open settlement process for municipal debts. The extrajudicial mechanism is the only operational option and applies strictly to those acting promptly and adhering precisely to stipulated procedures without delays.

Application Procedure and Required Documents: The extrajudicial mechanism platform is accessible at www.gov.gr (search for: Extrajudicial Debt Settlement Mechanism).

Documents needed for the application:

• Taxisnet codes
• Tax Identification Number (AFM) and email
• E1 and E3 tax statements (if applicable for businesses)
• Statement of debts (including municipal)
• Bank transactions and income details for the past 12 months

The entire process, including submission and response, is conducted digitally via the same platform.