From today, September 21, 2026, the new, enhanced framework for protecting the primary residence through the Out-of-Court Debt Settlement Mechanism comes into effect. The new regulation responds to the long-standing demand from citizens for a stronger protection framework for primary residences, while also introducing greater flexibility for hundreds of thousands of debtors.

More specifically, borrowers now have the option, when submitting their application on the out-of-court mechanism’s online platform, to request a debt restructuring that protects their primary residence, separating it from the rest of their real estate assets. Under the new, expedited restructuring process, they can secure greater debt write-offs and lower monthly installments, as only the value of the primary residence is taken into account when calculating the restructuring. In return, the debtor agrees to the voluntary liquidation of their remaining assets through a simplified auction process.

For vulnerable and eligible debtors, creditors are required to submit this specific alternative restructuring proposal, namely one that includes saving the primary residence and liquidating the remaining properties. In any case, the debtor may accept or reject this counterproposal. If they do not accept it, they will receive the out-of-court mechanism proposal as it currently applies, without the liquidation of the remaining properties.

Upon the final signing of the restructuring agreement, any act of compulsory enforcement, auction or imposition of precautionary measures against the debtor’s primary residence is expressly prohibited, provided that the terms of the restructuring are observed. In addition, the agreement itself acquires the status of an enforceable title, ensuring a short, clear and fully consensual process for all parties.

Under the new regulation, the protection of citizens’ primary residences is now permanently and effectively secured. At a time when economic challenges require immediate and fair solutions, the new framework combines social sensitivity with a realistic approach to debt settlement. It thus offers hundreds of thousands of borrowers a stable second chance to sustainably restructure their debts without the fear of losing their homes.

Example of a Restructuring

A debtor with total debts of €300,000 and a primary residence worth €150,000 submits an application on the Out-of-Court Mechanism platform stating that they wish to protect exclusively their primary residence, while also consenting to the liquidation of their remaining properties, with a total value of €50,000.

Steps for the debtor under the new procedure

1. They submit an application on the Out-of-Court Mechanism platform, stating that they wish to join the primary residence protection program.
2. The platform automatically separates the primary residence, valued at €150,000, from the remaining properties.
3. Joining the restructuring means that they consent to the liquidation of the remaining properties worth €50,000.
4. A restructuring is then calculated based solely on the value of the primary residence.

Step 1 — Calculation of the New Debt (Based Solely on the Primary Residence)

Under the new framework, the restructuring is based exclusively on the value of the primary residence:

New calculation basis = €150,000

Creditors are required to propose a restructuring that:

• • saves the primary residence
• • liquidates the remaining properties
• • reduces the debt to a sustainable level

Debt Write-Off:

Initial debt: €300,000

Value of remaining properties: €50,000 (liquidation)

Write-off resulting from the algorithm: €150,000

Creditors’ recovery from the liquidation of the remaining properties: €50,000

Debt to be restructured: €150,000

Step 2 — New Monthly Installment

The new debt to be restructured, amounting to €150,000, is restructured over a period of up to 35 years (depending on the debtor’s income).

Step 3 — Protection of the Primary Residence

Upon signing the agreement:

• • Auctioning of the primary residence by creditors covered by the out-of-court mechanism (banks/servicers/state/social security agencies) is prohibited
• • The agreement has the status of an enforceable title
• • The debtor is permanently protected, provided they comply with the restructuring

Under the new framework:

• • The debtor saves their home
• • The debt is reduced by half, from €300,000 to €150,000
• • The installments become sustainable
• • The process is consensual and fast