What is the new 120 installments for debts scheme?
The new framework extends the maximum duration for settling old debts from 72 to 120 monthly installments. This expansion is designed to accommodate a larger number of households and businesses by spreading the repayment over a decade, thereby lowering the immediate monthly financial pressure. Prime Minister Kyriakos Mitsotakis announced the measure during a recent Cabinet meeting, acknowledging that the repayment of old debts has become increasingly difficult for many, particularly small and medium-sized enterprises (SMEs).
The primary objective of this legislative shift is to encourage fiscal consistency by offering more time and smaller individual payments. By providing a longer runway for repayment, the government hopes to reintegrate debtors into the formal economy and reduce the massive volume of outstanding liabilities.
Key structural changes in the framework
The transition from the previous 72-installment model to the 120-installment model introduces several specific adjustments to how debt is managed. The most significant change is the increased flexibility in the repayment timeline, which allows for a more manageable cash flow for struggling taxpayers. Additionally, the window for applying for this regulation has been significantly widened to ensure broader participation.
How do the new repayment conditions and limits work?
The minimum monthly installment is set at €30, a figure specifically designed to assist those with smaller outstanding balances. Under these rules, taxpayers with total debts of up to €3,600 can qualify for this minimum €30 payment. However, the installment amount is progressive; as the total debt increases, the required monthly payment also rises accordingly.
The scope of the debts covered by this scheme has also been broadened. The 120-installment plan includes:
- Debts owed to tax authorities and social security funds that became overdue up to December 31, 2024 (an increase from the December 31, 2023, cutoff used in the 72-installment scheme).
- Debts that are not already under another active settlement regime as of September 30, 2026.
It is important to note that individuals or legal entities already successfully participating in the permanent 24-installment settlement plan remain excluded from this specific 120-month expansion, as they are already managing their debts under a different established framework.
What are the eligibility requirements and deadlines?
To qualify for the 120 installments for debts, applicants must meet strict criteria regarding their current fiscal standing and legal history. One of the primary requirements is that the debtor must not have any other overdue debts at the time of application. If such debts exist, they must have been legally settled through methods such as a payment suspension, a different settlement plan, a court decision, or a temporary injunction.
Furthermore, specific administrative and legal conditions apply:
- All income tax returns for the last five years must have been submitted.
- The applicant must not have received a final conviction for tax evasion or smuggling.
- Debts created after January 1, 2025, must either be fully paid off or integrated into the permanent 24-installment plan before the application for the 120-installment scheme is submitted.
Application timeline and activation
The deadline for submitting applications has been extended to June 30, 2027. This provides a significant buffer compared to the previous deadline of December 31, 2026, which applied to the 72-installment scheme. Once an application is submitted, the regulation is activated upon the payment of the first installment, which must be completed within three working days of the application filing. Subsequent installments are due by the last working day of each following month.
What is the impact on those already using the 72-installment plan?
Approximately 35,000 debtors who are currently enrolled in the 72-installment settlement scheme have the option to transition to the new 120-installment framework. By submitting a formal request, these debtors can redistribute their remaining balance over a longer period. This transition is specifically intended to reduce their monthly financial burden, providing much-needed liquidity to those who found the 72-month term too restrictive.
How are interest rates and penalties structured?
The interest rate for the 120-installment plan is set at 5.84%. This rate is identical to the interest applied to the permanent 24-installment settlement plan. However, it is notably higher than the 3% interest rate offered under the out-of-court settlement mechanism, which remains fixed for the entire duration of that specific process. Debtors should be aware that while more installments reduce monthly costs, they also increase the total interest paid over the life of the debt.
Risks of losing the settlement status
Maintaining the settlement is contingent upon strict adherence to payment schedules. A debtor will lose the benefits of the regulation and find the remaining balance immediately due if they fail to meet the following conditions:
- Failure to pay two consecutive monthly installments.
- Delaying the payment of the last two installments for more than two months.
- Failure to settle or legally organize other overdue debts (those not covered by the 120 installments) within one month of entering the scheme.
- Failure to settle or organize new debts that fall outside this specific scheme within three months of their respective payment deadlines.
What benefits do debtors receive from successful compliance?
Successfully participating in and maintaining the settlement provides several legal and administrative protections. Once the debtor is compliant, they are issued a certificate of updated status (enimerotiko), which is essential for various legal and commercial transactions. Additionally, the settlement provides a shield against legal repercussions and enforcement actions.
The primary benefits include:
- The suspension of criminal prosecution for the duration of the settlement; if the debt is fully repaid, any felony charges related to the debt are expunged.
- The suspension of new compulsory measures and the continuation of enforcement actions against assets, movable or immovable.
- Protection against third-party seizures, provided the third party is notified of the debt settlement decision.
FAQ: 120 installments for debts
What is the minimum monthly payment allowed?
The minimum monthly installment is set at €30. This specific amount is available to debtors whose total outstanding debt does not exceed €3,600. For higher debt amounts, the monthly installment will increase proportionally to ensure the debt is cleared within the 120-month limit.
Can I switch from 72 to 120 installments?
Yes, approximately 35,000 debtors currently utilizing the 72-installment scheme are eligible to apply for a transition to the 120-installment plan. This switch allows you to spread the remaining balance over a longer period, which effectively reduces the amount you are required to pay each month.
What happens if I miss two payments?
Missing two consecutive monthly installments will result in the immediate loss of the settlement. If this occurs, the entire remaining balance of your debt becomes due immediately, and the legal protections provided by the settlement, such as the suspension of enforcement actions, will be revoked.
What is the interest rate for this new plan?
The interest rate for the 120-installment plan is 5.84%. While this is the same rate as the 24-installment permanent settlement, it is higher than the 3% rate found in the out-of-court settlement mechanism. Remember that longer repayment terms result in higher total interest costs.
When is the deadline to apply for this scheme?
The application deadline for the 120-installment debt settlement is June 30, 2027. This is an extension from the previous deadline of December 31, 2026, which was associated with the older 72-installment framework, giving taxpayers more time to organize their finances.
Key takeaways
- The new scheme extends debt repayment periods from 72 to 120 monthly installments.
- A minimum monthly payment of €30 is available for debts up to €3,600.
- The application deadline for the new debt settlement is June 30, 2027.
- The interest rate for the 120-installment plan is fixed at 5.84%.
- Compliance provides legal protection, including the suspension of criminal prosecution and asset seizures.
Conclusion
The expansion to 120 installments represents a strategic attempt by the Greek government to address the massive €167 billion overdue debt burden. By lowering the monthly entry barrier to €30 and extending the application window to mid-2027, the framework seeks to provide relief to the most vulnerable taxpayers and SMEs. While the increased duration results in higher total interest costs, the primary benefit lies in the immediate reduction of monthly financial pressure and the restoration of legal and fiscal standing for thousands of citizens.
