ECONOMY

Debtors get second chance

debtors-get-second-chance

The Labor and Social Security Ministry is working on a legislative amendment to allow debtors who forfeited their social security repayment plans as a result of the pandemic to join some other arrangement.

Labor Minister Yiannis Vroutsis recently said that the ministry’s agencies are examining a re-inclusion plan of up to 120 installments for those who have been hurt by the pandemic and missed paying their tranches. This would be similar to the scheme announced recently by the Finance Ministry for tax debtors, with arrears due in 12 to 24 tranches.

The proposal has already been put to the representatives of the country’s creditors in the context of the eighth post-bailout assessment which started on Monday. Eurozone officials oppose such measures, arguing that they do not promote a responsible payment culture. In contrast, Greek government officials believe that those hurt financially by the pandemic should be given a second chance.

This second chance will concern the settlement of social security arrears to the Center of Social Security Debt Collection (KEAO) forfeited during the period when emergency measures against the pandemic were in place. It is reminded that all debt repayment plans were frozen for three months during the lockdown and resumed on June 30.

Debtors who missed two monthly installments or did not cover the debts accrued within 2020 have been left out of the arrangements. These people now face the resurgence of their original debt, along with penalties, fines, interest etc. Especially in the case of freelance and self-employed professionals the risk is twofold, as the original debt has been significantly reduced thanks to a recalculation, so the possible loss of the 120-tranche arrangement would entail a major cost.

Sources say one of the likely scenarios provides for the repayment of the missed installments so that the payment plan may then be revived without any negative consequences. There will also be an option for the simultaneous arrangement of debt accrued this year in up to 12 tranches.