Municipal debts: New regulation freezes for extrajudicial settlement

A new legislative regulation aims to resolve outstanding municipal debts for both citizens and businesses by removing a previous obstacle that excluded debts with existing enforcement or safeguard measures from the extrajudicial settlement process. While the 10,000 euro debt threshold remains, the regulation now explicitly allows debts subject to seizures to be included. The process clarifies that the total debt, including fines and surcharges, is treated as a Public Sector debt for settlement purposes, with the Tax Administration withholding 5% of collected amounts.

A key aspect of the provision is that existing enforcement measures will not prevent application for the out-of-court mechanism, and will be lifted upon a successful settlement. However, safeguards are in place: if a settlement is annulled, enforcement measures can be reinstated.

The regulation excludes debts nearing expiration (less than one year) and those under 10,000 euros. It applies to a range of municipal claims, including fees for cleaning, lighting, urban planning violations, and property leases, offering a pathway to resolution for debts previously stalled by enforcement actions.

(Source：Protothema)