With overdue or “red” debts of households and businesses to the State, social security funds, banks, and loan servicers now exceeding €235 billion, the Ministry of National Economy and Finance is launching a new package of measures during the summer concerning debt settlements, primary residence protection, and the lifting of bank account seizures. The aim is to provide relief to thousands of debtors facing auctions and forced collection measures.

The new measures will be implemented gradually starting next month, with different activation dates for each intervention. The central goal is to allow more debtors—including those with smaller debts—to enter the out-of-court settlement mechanism, while also establishing a new model for protecting primary residences.

The first change concerns lowering the minimum debt threshold for entering the out-of-court settlement mechanism from €10,000 to €5,000. The measure is expected to take effect in July, one month after the new legislation is passed, allowing debtors with smaller obligations to banks, the tax office, and social security funds to participate in debt restructuring.

According to estimates, this change could open the way for more than 1 million debtors who were previously excluded from the mechanism. For example, a citizen with a debt of €8,000 to a bank will now be able to join the mechanism and repay the debt in up to 240 installments, depending on their financial and property situation.

At the same time, a new emergency arrangement of up to 72 installments for overdue debts to the tax office and EFKA is expected to be activated within June. It will apply to debts certified up to December 31, 2023, which remain unregulated as of April 21, 2026. A prerequisite for joining the arrangement will be the repayment or settlement of debts created after January 1, 2024.

Under the new framework, those with debts exceeding €5,000 will be able to request inclusion in the out-of-court mechanism with repayment options of up to 240 monthly installments, provided they consent to lifting banking and tax confidentiality so that their financial and property status can be fully assessed. The interest rate will be set at 3%, and under certain conditions, partial debt write-offs (“haircuts”) may also be provided.

The second major change will take effect in August and concerns a new model for protecting primary residences. For the first time, debtors will be able to request a settlement exclusively for their primary residence without their entire asset portfolio being considered within the same framework.

In practice, the amount of the settlement, the monthly installments, and any potential debt reduction will be determined based on the value of the primary residence and the debtor’s income, rather than their total assets. The new model is expected to lead to more favorable arrangements for those trying to save the home they live in.

At the same time, other assets or secondary properties may be liquidated through electronic auctions to repay part of the debt, while preserving the primary residence. The debtor will have the right either to accept or reject the settlement proposal generated through the platform.

If accepted, a long-term repayment agreement for the value of the primary residence will be signed, with continued protection depending on the consistent payment of installments and compliance with the terms of the arrangement.

The creation of the Property Acquisition and Leaseback Agency is also in its final stages. This body will purchase the primary residence of vulnerable debtors that is headed for auction and then lease it back to them for 12 years. In this way, the debtor will be able to remain in the home by paying rent, while retaining the option to repurchase the property either after the 12-year period or earlier, provided they meet the requirements and remain consistent with their obligations.

At the same time, they will receive a housing subsidy ranging from €70 to €210 per month for as long as they lease the property from the Agency, helping ensure rent payments are maintained.

A separate intervention is also planned regarding the lifting of bank account seizures. The release of frozen accounts will be activated upon immediate repayment of 25% of the total debt and inclusion of the remaining amount in a settlement plan. However, this option will only be available once, and in the event of new debts, full repayment will be required before it can be activated again.

Recent data show that the use of the out-of-court settlement mechanism continues to grow. In April alone, 2,172 new settlements were completed involving initial debts totaling €588 million, an increase of 51% compared to the same month last year. Overall, since the platform began operating, 60,388 successful settlements have been completed, corresponding to initial debts totaling €18.64 billion.