Debt Collection Agency Greece
Amicable Collections Greece
1. General Information
In the amicable phase, the collector gets in contact with the debtor. The collection process commences with an automatic letter sent to the debtor’s email address (if any) or fax number from our system, followed by an initial telephone call. Investigations are also conducted via internet sources and local contacts. It is important to have relevant documentation from the beginning of the case and know the debtor company’s VAT number in order to check if the company is active under the Greek General Commercial Registry (www.businessregistry.gr/publicity/index). Note: Commercial claims have a time limit of five years, starting from the original due date.
1.2. Local agents
Cosmopolite Collections have several attorneys and debt collection partners acting on our behalf in Greek territories and collecting our clients’ claims either in court or out of court. All our attorneys and agents in Greece are in a position to check the debtor’s financial status, order a credit report (estimated cost: EUR 150) and examine the court registries and the Bulletin of Judicial Publications (deltio.tnomik. gr/decisions) for court decisions and actions against the debtor. They can also check the Land Registry (estimated cost: EUR 300–EUR 350) for immovable property and the solvency of the debtor (estimated cost: EUR 150) if this is not clear (bankruptcy, article 99). Furthermore, personal visits to the debtor can be organised in the areas of Athens and Thessaloniki for significant outstanding debts. As the last amicable step before proceeding with legal actions, our agents can instruct the local bailiff to serve an Extra Judicial Declaration (EJD) or an out-of-court notice or a Letter Before Action (LBA) to the debtor (estimated cost: EUR 150–EUR 250 depending on the distance).
Late payment interest may be charged to the debtor on the first overdue day. The Recast Directive 2011/7/EU, which stipulates that payments in the EU must be made within 60 days, was transposed into domestic law through Law 4152/2013 (which retroactively entered into force on 16th March 2013). In contrast to the regulations set forth in most EU member states, late payment rules in Greece are very comprehensive: in general, payment terms in business-tobusiness transactions must not exceed 60 calendar days unless otherwise agreed by contract and provided that the delays are not grossly unfair to the creditor. Beyond this point, interest may be due as negotiated by the parties. But in any case, the law allows creditors to charge an automatic interest rate approximately from 7% to 8%.
1.4. Debt collection costs in Greece
In theory, the transposition of the Recast Directive 2011/7/ EU into domestic law would entitle creditors to charge a flat EUR 40 collection fee when payment is late. In practice, however, it is very uncommon to do so unless a claim is brought to court.
2. Legal collections
2.1. General information
Depending on the available documents and if the open debts are disputed by the debtor, it is possible to apply a payment order at court or initiate court proceedings such as a lawsuit, preliminary measures or filing for bankruptcy.
2.2. Required documents
In order to apply a payment order, Cosmopolite Collections need at least one of the followings: A notarised acknowledgement of debt A private acknowledgement of debt with tax stamps Original bills of exchange, promissory letters, bounced cheques A copy of the invoice and proof of delivery, possibly in original, signed and stamped by the debtor upon receipt of the goods, or any document from the debtor or the transporters proving receipt of the goods (e.g. sale ex works). In cases of regular lawsuit procedures, copies of the complete contractual documentation should be available, starting with the contract, orders, order confirmations, delivery notes, invoices, and the likes.
2.3. Payment order
In order to start the proceedings, a payment order needs to be applied at the court of first instance or with the justice of the peace according to the claim amount. After an examination of the documents, if the court is of the opinion that the debt is legally due for payment, it will issue a payment order within 50 to 60 days (more or less depending on the workload), which is immediately enforceable if unopposed by the debtor. The debtor has 15 days after the notification of the payment order to file their objection. In case of objection, the proceedings will be transferred into the ordinary legal proceedings. In case of bounced cheques, the payment order should be filed within six months from the date that the cheques were bounced. In case of bills of exchange, there is a time frame of three years. When the debtor has assets in other EU member states, a European Payment Order procedure (facilitating the recovery of undisputed debts under Regulation EC No 1896/2006) may then be triggered. In this case, the creditor may request a domestic court to issue an Order to Pay, which would then be enforceable in all EU countries (except for Denmark) without exequatur proceedings.
2.4. Penal procedure
This procedure regards the felony of the debtor issuing bounced cheques. In this case, Cosmopolite Collections have the possibility to proceed against the person who signed the cheques at the Penal Court. The time frame is three months after the cheques were bounced. This procedure aims to further pressure the debtor who is facing imprisonment in case they do not pay.
If sufficient documentation as described above cannot be provided or the payment order could not be issued, the ordinary legal proceedings have to be applied at court. Greece have a Civil Law system inspired by the French and German legal framework. The law is therefore largely codified and the courts are not bound by precedents, even though consistent decisions tend to be used for guideline purposes. Since a reform conducted in 2012, claims below EUR 20,000 fall under the jurisdiction of the Justices of the Peace Tribunals (‘Eirinodikeio’), and claims up to EUR 250,000 are dealt with by Single-Member Courts of First Instance (‘Monomeles Protodikeio’). Claims in excess of this amount are dealt with by Multi-Member Courts of First Instance (‘Polymeles Protodikeio’). Amendments to the Greek Civil Procedure Code, Law 4335/2015 Came into effect from 1st January 2016. The basic scope of changes attempted through the new provisions relates to the ordinary proceedings before the Courts of First Instance as well as to the compulsory enforcement procedure where the longest delays are observed. The partially oral hearing process undertaken so far in the ordinary proceedings is replaced by a written procedure. In the exceptional case that the court considers that the case has not been sufficiently clear to proceed to the issuance of a decision and considers that there are special reasons for an examination of witnesses, the court may issue an act for summoning witnesses. The pleadings are submitted within a term of 100 or 130 days (depending on the case) from the submission of the lawsuit, and the additional pleadings should be submitted within the following fifteen days from the expiry of the above deadline. With the lapse of the said deadline, the file of the case is considered closed. Within a term of fifteen days starting from the date that the file is closed, the judge or the court composition is appointed; while at the same time, a hearing for the discussion of the case is determined at a time period no longer than thirty days. It should be noted that at the said hearing, no witnesses are examined and the case may be discussed without the presence of the parties or their attorneys. Furthermore, since the oral debate on the hearing date has been abolished and replaced by a written procedure, the testimonies of the witnesses (five maximum from the submission of all evidence until the closure of the case) must be provided by an affidavit, usually stated before a Notary Public. In case the witnesses reside abroad, the procedure for receipt of the affidavit takes place at the appropriate consulate, following all legitimate publicity procedures and deadlines. Note 1: It should be noted that the amendment regards the cases of the Peace Tribunals and the Courts of First Instance (claims greater than EUR 5,000). That means small cases (claims up to EUR 5,000 ) are still held according to the old procedure. Note 2: It should be noted that given the fact that the new procedure is shorter than the old one, proceeding with preliminary or provisional measures is only advised when the debt is old (old invoices) and there is a matter of urgency to secure the claim (e.g. in case Cosmopolite Collections find out that the debtor has many departments and may apply for bankruptcy from one day to another).
2.6. Debt collection costs
All costs depend on the outstanding principal amount and are calculated proportionally. There are different fees that can apply during a procedure, so there is not only a range regarding the outstanding amount but also a range regarding the possible fees for each action. This makes it difficult to predict the total cost. In addition to this, costs of witnesses and/or experts might also arise. The courts normally award costs to the defeated party, naming the exact amount in the decision. Cost calculations are left to the court’s discretion.
2.7. Expected time frame
The average duration of a payment order process is between three and four months, whereas an ordinary procedure can take up to six or eight months or longer, depending on the complexity of the case and the availability of the judge and lawyers on all sides. According to our experience, the ordinary procedure with one judge is faster
2.8. Interest and costs in the legal phase
The legal interest in Greece is calculated via the lawyers’ Bar Association platform by the lawyers and there is no standard formula as the calculation depends on the amount and the age of the debt. As far as the legal proceedings are concerned, any interest is claimed according to article 293 of the Greek Civil Code and the enforcement law number 166/2003, both of which define that the rate of interest is calculated according to the rate of interest applied by the European Central Bank accrued by eight points. The older the debt, the higher the interest. During the legal proceedings, according to article 423 of the Greek Civil Code, the debtor has the obligation to pay the legal expenses first, then the legal interest and then the capital.
3. Insolvency proceedings
3.1. General information
The initiation of bankruptcy proceedings is the long-term inability of a company to meet their overdue financial obligations. The Greek Bankruptcy Code was enacted in 2007 (Law 3588/2007, as amended in 2010, 2011, 2012, 2015 and most recently in December 2016) to harmonise a fragmented legal framework. It introduces a debt reorganisation process as a means to avoid systematic liquidation of viable companies in temporary financial difficulty. In addition, the most recent amendments to the law aimed at decreasing delays and ensuring that debtors would no longer be able to use insolvency proceedings to delay payments any further. Nonetheless, collecting money out of insolvency proceedings remains very difficult.
3.2. Out-of-court proceedings
Law 4469/20 recently adopted by the Greek Parliament and published on 3rd May 20 introduces a new process of extrajudicial debt settlement for individuals and legal entities under specific conditions and with optional ratification by the court. The procedure is initiated through an application by the debtor, including a proposal for the settlement of their debts, and aiming to conclude a debt settlement agreement with the mediation of a coordinator. The new law entered into force three months after its publication, in August 20 and will cover debts that are overdue as of 31st December 2018.
3.3. Pre-bankruptcy proceedings
The reorganisation process starts with the submission of a plan to the court made by specialists (auditors, banks, and the likes), who conduct a judicial review of the proposed plan while a court-appointed mediator assesses the creditors’ expectations. The plan may only be validated upon approval by creditors representing 60% of the total debt (in this amount, a percentage of 40% representing the privileged claims must be included). When no agreement has been reached, the court may order a liquidation phase upon request.
As a general rule, insolvent companies must file a bankruptcy petition within 30 days following their cessation of payments (voluntary liquidation), but creditors may also bring a claim against the debtor (involuntary liquidation). The creditors are then invited to file their claims within 30 days. The proceedings may commence under the supervision of an administrator (a syndicate appointed by court) as soon as the debts are verified. In addition, a pool of creditors (i.e. three members representing each class of the creditors) would be given the responsibility of overseeing the proceedings, which would terminate once the proceeds of the sale of the business’ assets are distributed. The lodging of claims in the insolvency proceedings is done by our local lawyers, as the proceedings are quite complex in Greece and all lodgings have to be made in Greek. The bankruptcy process is quite lengthy.
3.5. Required documents
Copies of invoices signed by the creditor and authenticated by a notary, certifying the signature and confirming that the copy is a true copy of the original remaining unpaid according to the company’s official books. The document should bear the apostille of The Hague Convention. However, certified copies of the invoices are not required if the buyer has accepted a bill of exchange or signed a promissory letter duly stamped. A power of attorney notarised and stamped with the apostille of The Hague Convention. Furthermore, a witness of the creditor might need to testify before the court.
3.6. Expected time frame and outcome
The time frame for the completion of the procedure of corporate restructuring cannot be accurately estimated (more than three years on average), but it is likely to be similar to the time frame estimated for the procedure of conciliation. The outcomes of the procedures of conciliation and bankruptcy are very poor.