Extrajudicial mechanism set to include 2018 debts

Extrajudicial mechanism set to include 2018 debts

The government is expected to include debts that expired in 2018 in the provisions of the recently revised out-of-court debt settlement mechanism.

The adjustments introduced to the extrajudicial mechanism for the arrears of businesses and freelance professionals just before the turn of the year include the extension of the mechanism’s operation until December 31, 2019, the date by which debtors may submit their applications.

Within the next few months, though, the Finance Ministry is expected to extend the scope of the settlement mechanism to debts created last year, a step has been decided after being discussed with the country’s creditors when their representatives conducted negotiations with the local banks. To date it is only debts that became overdue by December 31, 2017, that qualify for settlement via the extrajudicial mechanism.

Kathimerini understands that the extension to include the arrears accrued last year was not included in the recent amendment of the mechanism because negotiations with creditors have not yet reached a definitive conclusion and above all because the government did not want to generate a new wave of expired debts from strategic defaulters.

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