Recovering debts Greece Rehabilitation procedure
If you have to recover a claim in Greece, you need to realise that the procedure is not simple and is different from that in Italy or other EU countries. Greece has introduced a new procedure for the recovery of claims called “rehabilitation procedure”. It is an out-of-court procedure that Greek legislation recommends to debtors and creditors.
Red tape in Greece is actually worse than in Italy
Bureaucratic procedures in Greece are a major stumbling block. The statute of limitations for debt is 5 years and not 10 years as in Italy. So, there is half the time available for taking legal action. Then, creditors need to grant a direct proxy and cannot take action through a debt collection agency unless they grant it a notarial proxy, i.e., a proxy drawn up by a notary public. Finally, the application for a letter of formal notice commences with a notarial power of attorney. The procedures for initiating bankruptcy proceedings, obtaining an injunction, lodging proof of debt, ordering payment and all the other bankruptcy proceedings are much more complicated than those in Italy.
Debt collection in Greece
First, a debt collection proceeding can be initiated if you have the original invoice, shipping note signed by the customer or supply order.
How to initiate a debt collection proceeding
Due to the Greek bureaucracy, every law firm usually advises starting the debt collection proceeding by out-of-court or extrajudicial means.
Demand letter. Invitation to collection and settlement meetings in Greece
The Demand Letter is the first step to take. It is a formal reminder drawn up by a law firm, indicating the origin of the debt, the total amount due, including late payment interest and extrajudicial legal fees, and the request for a meeting to reach a settlement by which a contractual debt repayment plan, supported by valid guarantees, is agreed.
Debt collection by court proceeding
If the case so requires, you can proceed with court proceedings to obtain a ruling for payment of the debt, an injunction, an order for payment or proof of debt. Claims below EUR 20,000 fall under the jurisdiction of the Justices of the Peace Tribunals. Claims from EUR 20,000 to EUR 250,000 are dealt with by Single-Member Courts of First Instance. Claims in excess of EUR 250,000 are dealt with by Courts of First Instance with 3 justices. Article 14 of the Code of Civil Procedure
European and Greek bankruptcy legislation
European payment orders are also recognised in Greece, but only once a Greek court has ruled that it is enforceable. The motion for an enforcement order for debt collection must comply with the provisions of Greek law and be filed by a Greek lawyer. Mandatory representation by a Greek counsel in the competent court is required, depending on the defendant’s place of residence. In addition, Greek courts require that all documents produced be duly translated and legalised.
Enforcement procedure
If you are able to obtain an order by a Greek judge certifying the debt, you can request enforcement to recover your claim. Enforcement is carried out by a bailiff in the form of a confiscation order or payment order. A court officer determines which movable and immovable property can be seized by creditors.
Pre-bankruptcy or rehabilitation procedure
As a result of the Greek financial and economic crisis and to safeguard Greek companies, Greece has recently adopted the ‘Rehabilitation Procedure’. It is a recommended extrajudicial procedure for both debtors and creditors. The elements of the rehabilitation process are those of the review for the company’s organisation, or its winding-up and the proposal for arrangement between the parties to settle the claim. The procedure is becoming widespread in Greece, due to difficulties in recovering claims and to the complexity of the law and bureaucratic procedures governing the recovery of outstanding claims, but it is often perceived negatively by creditors.
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