Leptokaridou Law Firm
Debt Collection in Greece
If a person or company owes you money and informal attempts to collect the debt, such as phone calls or written reminders, have been unsuccessful, the Greek legal system provides the framework within which debt collection operates. This includes laws and regulations that govern the process, the rights of creditors and debtors, and the mechanisms for dispute resolution.
Debt collection in Greece is governed by a combination of national laws and regulations, as well as applicable European Union directives and regulations.
The main Greek laws regulating debt collection include the Greek Civil Code and the Code of Civil Procedure, as well as Law 3758/2009 on Debt Collection Agencies, Law 3588/2007 (the Bankruptcy Law) and Law 4512/2018, which contains provisions on the out-of-court settlement of debts.
Debt collection in Greece: The whole process in 7 steps
Debt collection can involve various types of debt, such as bank loans, credit card debt, unpaid bills, or other forms of credit.
The process usually begins with informal attempts to collect the debt, such as phone calls or written reminders. If these attempts are unsuccessful, the process may escalate to more formal actions.
If a debt remains unpaid, creditors may resort to legal action. This may involve filing a lawsuit in court. The legal process can result in a variety of outcomes, such as a court order to pay the debt, seizure of property, or other legal consequences for the debtor.
From the first informal attempts to collect the debt to the outcome of a legal action, here is the step-by-step process to follow in Greece.
1- Initial actions
Start by verifying the details of the debt to ensure that the amount owed, the identity of the debtor, and the due date are accurate. This is critical to avoid litigation over the validity of the debt.
Once verified, initiates contact with the debtor through an internal reminder. This reminder can be informal, such as a phone call, email, or letter that gently reminds the debtor of the overdue payment. The goal at this stage is to resolve the issue amicably without escalating to formal procedures.
2- Amicable Collection Phase
If the internal reminder does not produce results, escalate to a more formal approach by sending a demand letter.
This letter is more structured and assertive, clearly stating the details of the debt, including any accrued interest or penalties, and setting a firm deadline for payment.
At this stage, it is helpful to remain open to negotiation and offer the debtor an opportunity to propose a workable payment plan or negotiate a settlement.
This step is a final attempt to collect the debt while maintaining a positive relationship with the debtor and avoiding legal action.
3- Engage a Debt Collection Agency
If internal collection efforts fail, you may choose to hire a collection agency. The agency’s role is to persuade the debtor to fulfill his financial obligation, using its expertise in debt collection.
This transition requires you, the creditor, to provide the agency with all relevant information about the debtor and the outstanding debt.
The agency then takes over the collection process, using various methods such as phone calls, letters and personal visits, always within the legal limits set by Greek law.
4- First Legal Consultation
When amicable collection methods prove unsuccessful and the collection agency fails as well, it is time to consider legal action.
The first step is to consult with a legal professional to evaluate the feasibility and potential success of taking the matter to court.
If legal action is recommended, the attorney will prepare the necessary paperwork to initiate legal action, which includes drafting a complaint outlining the creditor’s claim against the debtor.
5- Take Legal Action
The legal process begins with the filing of a lawsuit in the appropriate court.
This step involves presenting the case against the debtor, which includes court hearings, presentation of evidence and legal arguments by both parties.
The court then deliberates and finally issues a judgment.
If the judgment is in favor of the creditor, it will specify the amount the debtor is legally obligated to pay, including any additional costs incurred during the legal process.
6- Request an Enforcement Order
Finally, if the debtor does not comply with the court order, you can apply to the court for a writ of execution. This order allows you to legally seize the debtor’s assets.
The seized assets can then be sold, usually by public auction, and the proceeds used to pay off the debt.
This stage is crucial as it ensures that the creditor receives the amount owed, especially in cases where the debtor is unwilling to voluntarily comply with the court’s judgment.
7- Recover the debt
As soon as any part of the debt is recovered, whether through voluntary payment by the debtor or through enforcement action, these payments are applied to the outstanding debt.
This application covers the principal amount, any accrued interest, and any legal costs.
When the entire debt is recovered, the creditor or collection agency formally closes the case.
How long does the entire debt collection process take?
The debt collection process in Greece can take anywhere from a few months to several years.
The duration can vary significantly depending on several factors, including the complexity of the case, the debtor’s response and whether legal action is required.
The initial phase, during which the creditor sends an initial reminder and attempts to reach an amicable settlement, can last from a few weeks to a few months. This is because creditors usually allow a reasonable period of time for the debtor to respond to reminders and demand letters.
If the creditor decides to use a collection agency, this can extend the timeline.
Consulting with an attorney and preparing for a possible lawsuit can take additional weeks or months. And the legal phase that follows can be the most time-consuming, especially if the case goes to court. Trials in Greece can be lengthy, often taking several months to over a year, depending on the court’s schedule, the complexity of the case, and any appeals.
Of course, these are general considerations, and for a more accurate estimate, it is advisable to contact our law firm as early in the process as possible and take advantage of our legal services in Greece.
Can I recover all of my credits?
Unfortunately, there are no guarantees of full recovery when engaging in debt collection.
The most important factor is the debtor’s ability to pay. If the debtor is experiencing financial difficulties, is in bankruptcy, or has limited assets, full recovery may be difficult.
Even if a court rules in your favor, actual recovery depends on enforcement of the judgment. And if the debtor lacks sufficient assets or hides them, it may be difficult to collect the full amount.
For this reason, creditors sometimes opt for negotiated settlements to recover a portion of the debt. While this may not recover 100% of the amount owed, it can be a more secure way to recover some of the debt, especially in cases where full recovery is uncertain.
As a general rule, the longer the debt collection process, the more difficult it may be to collect the full amount. Older debts may be more difficult to collect, and the debtor’s financial situation may change over time.
How We Can Help You With Debt Collection in Greece
At Leptokaridou Law Firm we are experts in debt collection in Greece, especially in cases of cross-border debts, corporate debts and large sums.
By handling the legal aspects of debt collection, we can save you time and resources, allowing you to focus on your business or personal affairs while we manage the collection process.
At every step of the process, we will ensure that all debt collection activities are conducted in compliance with applicable laws, which is critical to avoiding legal violations that could result in penalties or damage to your reputation.
If you need to recover a debt in Greece, here is how we can help you:
- Legal Advice and Strategy: We provide legal advice tailored to your specific situation, helping you to understand your rights and obligations under Greek law. We will then develop a strategic approach to debt collection, taking into account both the legal framework and the practical aspects of your case.
- Advice on feasibility: In some cases, pursuing a debt may not be cost-effective or may have little chance of success. We can provide a candid assessment of the viability of your case and advise whether to pursue, settle or write off the debt.
- Legal document preparation: Drafting legal documents, including demand letters, settlement agreements, and court filings, is critical to formally asserting your claims and must be crafted to comply with legal standards and effectively communicate the seriousness of your claim.
- Negotiation and Mediation: We act as a mediator between you and the debtor, facilitating settlement negotiations. We can help structure payment plans, negotiate settlements, and ensure that any agreement reached is legally binding and protects your interests.
- Court representation: If the collection process escalates to litigation, our firm will represent you in court. We will handle the filing of lawsuits, present your case, manage court appearances, and advocate on your behalf.
Enforcement of Judgments: After a court judgment is obtained, our attorneys assist in the enforcement process. This includes filing for writs of execution, initiating proceedings to seize and sell assets, and ensuring that the court’s judgment is effectively executed.
* The information on this site is provided for the sole purpose of illustrating the subject matter. It in no way constitutes legal advice nor a substitute for individual legal advice provided by counsel. Each case is unique, presents unique circumstances, and should be evaluated in detail by an attorney who will verify its specific circumstances.
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Debt Collection in Greece
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