Efficient cash flow management is a cornerstone of every successful business, and when payments are delayed or withheld, companies must rely on clear and lawful mechanisms to recover outstanding debts. Debt collection in Greece follows a defined legal framework designed to balance the creditor’s right to payment with the debtor’s right to fair treatment. Understanding the rules, procedures, and cultural aspects of Greek commercial debt recovery is essential for any business operating within or dealing with Greek entities.
1. The Legal Framework
The primary legislation governing debt collection in Greece derives from the Greek Civil Code and the Greek Code of Civil Procedure. Additionally, European Union directives, such as Directive 2011/7/EU on combating late payment in commercial transactions, are fully incorporated into Greek law. This means that creditors are entitled to statutory interest and reasonable compensation for recovery costs in cases of late payment by commercial debtors.
2. Amicable Collection Phase
Before initiating formal legal proceedings, creditors are strongly encouraged to pursue amicable collection methods. This stage involves direct communication with the debtor—through written reminders, emails, or phone calls—requesting payment or negotiating new terms. Professional collection agencies or law firms often assist in this process to maintain professionalism and ensure compliance with local laws, including data protection regulations under the GDPR.
Greek business culture values negotiation and maintaining long-term relationships, so an amicable approach often proves effective. Clear documentation of all communication and agreements is crucial, as it can serve as evidence if the matter later escalates to court.
3. Legal Debt Recovery Procedures
If amicable efforts fail, the next step in debt collection in Greece is formal legal action. Creditors have two main options:
- Payment Order Procedure (Diatagi Pliromis):
This is a fast-track process suitable for uncontested monetary claims supported by written evidence such as invoices, contracts, or delivery notes. The application is filed before a competent court, and if accepted, a payment order is issued without a full trial. The debtor then has 15 days to object; otherwise, the order becomes enforceable. - Ordinary Lawsuit:
For disputed or complex claims, a standard court procedure is required. This process can take longer and involves hearings, evidence submission, and legal representation by Greek-qualified lawyers.
Both methods can result in enforceable judgments that allow creditors to pursue enforcement actions such as asset seizures, bank account freezing, or property auctions.
4. Enforcement of Foreign Judgments
For international creditors, debt collection in Greece may involve enforcing a foreign court judgment or arbitral award. Under EU Regulation (EU) No. 1215/2012 (Brussels I Recast), judgments from EU member states are recognized and enforceable in Greece without the need for a separate recognition procedure. For judgments from non-EU countries, recognition must be sought through Greek courts based on bilateral treaties or principles of reciprocity.
5. Insolvency and Restructuring
If a debtor faces severe financial distress, Greece provides specific procedures under the Greek Insolvency Code. Creditors may file for bankruptcy or participate in restructuring proceedings. In such cases, the recovery prospects depend on the ranking of claims, available assets, and the debtor’s financial position. Secured creditors generally enjoy priority in repayment.
6. Role of Professional Agencies and Legal Advisors
Working with a reputable law firm or specialized collection agency familiar with local regulations significantly increases the likelihood of recovery. Professionals handling debt collection in Greece can navigate the procedural nuances, language barriers, and court formalities more efficiently. They also ensure compliance with ethical standards and consumer protection rules, minimizing the risk of reputational damage to the creditor.
7. Preventive Measures
Prevention remains the most effective strategy. Businesses should conduct due diligence on Greek partners, draft clear payment terms, and include jurisdiction and dispute resolution clauses in contracts. Timely invoicing and proactive communication help mitigate potential payment delays.
Conclusion
Navigating debt collection in Greece requires a strategic mix of legal knowledge, cultural awareness, and professional support. Whether through amicable negotiation or formal legal action, understanding the Greek legal environment helps businesses safeguard their financial interests and maintain commercial stability. For international companies, partnering with local legal experts is not just an advantage—it is often the key to successful debt recovery in the Greek market.
Source: Grandliga website
