It almost always arrives in the same way: a document served by a bailiff, a letter from a loan 'servicer' you have never heard of, or a formal notice full of figures and short on humanity. Most people's first reaction is to put it in a drawer. Unfortunately, that is also the worst response. In enforcement law, time does not favour the person who hides.

Let us start at the beginning, calmly. If you owe money and your home is at risk, you have more tools than you may think - and further tools were added in 2026. The question is not whether a defence exists, but whether you activate it in time and in the right order.

First rule: ignore nothing

Every document that arrives - a formal demand, payment order, demand for enforcement or compulsory seizure report - starts a time limit. Many of the strongest defences, including judicial challenges, must be filed within strict deadlines. If you let a deadline expire, you lose the right - not because your position lacked merit, but because you acted too late. In practical terms, on the day you receive anything relevant, record the date and take it to a lawyer. Not a week later: within that same week.

Check who is pursuing you

Most non-performing loans have been transferred to funds and are administered by credit-servicing companies, known as servicers. Their legal standing - whether they can lawfully prove their right to pursue enforcement against you - is one of the first points a lawyer will examine. This is not a technical detail; it has served as a basis for setting auctions aside.

The first and strongest tool: out-of-court debt settlement

Before turning to the courts, there is a route that many people overlook through fear or lack of information: the Out-of-Court Debt Settlement Mechanism (exodikastikos michanismos rythmisis ofeilon). Through an online platform, the debtor submits financial information and the system uses an automated algorithm to generate a restructuring proposal covering all creditors together: banks, funds, the State and social-security funds.

What can it achieve? Three things that can change lives:

  • Long repayment periods: up to 420 instalments for banks and funds, and up to 240 instalments for the State and social-security funds.
  • A debt 'haircut': part of the debt - principal, interest or surcharges - may be written off, depending on the debtor's actual means.
  • Breathing space: protection from enforcement measures is available while the procedure is in progress.

It is not a cure-all: the proposal may not suit you or may not be accepted. For most households, however, it is the logical first step before any court battle.

What changed in 2026

Three interventions during the year shifted the balance, at least partly, in the debtor's favour:

  • The criteria for 'vulnerable debtor' status were doubled. The income and asset thresholds used to determine vulnerability were broadened, bringing more households within the special protection.
  • A written proposal is mandatory before enforcement action. Before taking any compulsory measure, the creditor must have submitted a written restructuring proposal at least three months earlier. Failure to do so is not without consequences.
  • Targeted protection of the primary residence. A debtor may seek a lower instalment specifically for the arrangement concerning their first home - although the price may be that the remaining assets are sold.
The Acquisition and Leaseback Agency (Foreas Apoktisis & Epanamisthosis)

This is the most widely discussed new tool. Where a vulnerable debtor cannot keep the home through restructuring, the Agency buys the primary residence at a discount of approximately 30% from its value and leases it back to the same debtor for 12 years, with a right to repurchase it at the end. In essence, you do not lose your home as a place to live, but move from owner to long-term tenant, with the door left open to buy it back. It is not a solution for everyone, but for some people it is the difference between staying and leaving.

When the auction stage is reached: court protection

If the earlier measures have not worked and enforcement proceeds, the case is not over. The principal remedy is a judicial challenge (anakopi), whose form depends on the stage reached:

  1. Challenge to the payment order. If the claim is based on a payment order, you may challenge it within the statutory deadline by disputing the amount, the enforcing party's standing or unfair charges.
  2. Challenge to enforcement. This is directed against the demand for enforcement and the steps that follow, on grounds concerning the procedure, standing or the substance of the debt.
  3. Challenge to the auction and application for a stay. You may ask the court to stay the auction until the challenge is decided - a crucial brake that buys time and often creates the opportunity for a solution.

Each remedy has its own deadline and requirements. This is not a process to undertake alone using a template found online; it requires a lawyer experienced in compulsory enforcement.

The law does not promise that your debt will disappear. It does, however, offer time, instalments, write-offs and - in many cases - a way to remain in your home.

A practical roadmap: the order in which to act

  • As soon as you receive any document, record the date and take it to a lawyer; the deadlines are already running.
  • Ask for the fund's or servicer's legal standing and the exact amount of the debt to be checked.
  • Consider the Out-of-Court Debt Settlement Mechanism as the first comprehensive solution covering all creditors.
  • Check whether you meet the broadened vulnerable-debtor criteria and what that status makes available, including protection and the Agency.
  • If enforcement proceeds, file a judicial challenge and application for a stay in time.
  • Keep a complete file: every letter, deadline and restructuring proposal. You will need them.

Frequently asked questions

Does entering the out-of-court mechanism 'freeze' the auction?

Subject to conditions, protection from compulsory-enforcement measures is available during the procedure. It is not an automatic shield in every case, so the application must be filed correctly and in good time, ideally before enforcement advances.

Am I a 'vulnerable debtor'? How can I tell?

The classification depends on income and asset criteria, which were broadened for 2026. The assessment is based on your actual circumstances; a lawyer or insolvency adviser can quickly tell you whether you qualify and which tools that status opens up.

Will the Agency take my home for good?

The model involves purchase at a discount and leaseback for 12 years, with a right to repurchase. You therefore remain in the home as a tenant and retain the possibility of buying it back. Whether this is advantageous depends on your own finances and alternatives.

I cannot afford a lawyer. What can I do?

Legal aid is available to people who meet the income criteria, and debtor-information services are also available. Inaction is the worst response; even an initial consultation can preserve deadlines that would otherwise be lost.

NE
Editorial Team - Nomika EpilektaCompulsory enforcement & debt settlement · July 2026

This article is for information only and does not constitute legal advice. Deadlines and requirements in compulsory enforcement are strict and case-specific; delay may cost you legal rights. Consult a lawyer immediately about your own case.

AuctionsFirst homeOut-of-Court Debt Settlement MechanismNon-performing loansVulnerable debtorJudicial challenge

Sources and verification

Before publication, this article was checked against official or primary sources. Figures and thresholds may change through later legislation or circulars.