When are debts considered “uncollectible” – new standards and conditions

New standards and conditions for characterization Debts As “unacceptable for collection” comes the new decision of its governor AddyGeorge Pitselis.

According to the decision, overdue debts owed to the state and debts guaranteed to third parties will be classified as uncollectible if certain general criteria are met, the most important of which is whether there is any possibility of actually collecting them.

Specifically, the new Pizzelli decision states:

1. Overdue debts to the state and debts guaranteed to others are classified as uncollectible if the following are cumulatively present:

A) Investigations were completed on the basis of electronic means available to the Tax Administration and these investigations did not prove the existence of the assets of the debtor and the obligated partners or that the sale of their non-taxable assets was canceled or violated in accordance with Articles 939 et seq. of the Civil Code, and in particular, it was proven that the procedures Execution on movable or immovable property or claims against the responsible persons mentioned above may be expedited by the state, third parties or by the liquidator. Within the framework of liquidation procedures and cessation of bankruptcy procedures, if the persons responsible for them have declared bankruptcy, and this has not been done. The rental of a bank safe deposit box by the debtor or obligor does not prevent the debt from being described as uncollectible, even before the burglary occurs, as long as the lien has already been placed in the hands of a third party.

b) The request for criminal prosecution must have been submitted in accordance with the provisions of Article 25 of Law No. 1882/1990 (A43) in all cases where the legal conditions are met or it is not possible to submit it.
c) The audit is carried out by a specially appointed auditor from the competent service of the Independent Public Revenue Authority, who certifies, based on a specially justified audit report, that the conditions of paragraphs (a) and (b) are met and it is objectively impossible to collect the debt. Exceptionally, if the provisions of paragraph 4 or paragraph (a) of paragraph 5 apply, the audit report shall certify, instead of supporting paragraph (a) of this paragraph, the provisions of these provisions, as the case may be. If the debtor or co-debtor dies and falls within the scope of application of paragraph (b) of paragraph 5, in particular in relation to the deceased debtor or obligated co-debtor, only the contribution of this case shall be approved.

2. For companies subject to State control or exercising State supervision that are under liquidation or bankruptcy, the State shall be notified of such proceedings and the assistance in paragraph (b) and (c) of the preceding Paragraph 1 is required.

3. For debts relating to communities of diaspora organizations that own Greek schools abroad, it is necessary to resort to paragraph (c) of paragraph 1.

4. As an exception to the provisions of Paragraph (A) of Paragraph (1), debts are classified as uncollectible despite the presence of assets of the debtor or co-obligor, if the following conditions are collectively met with respect to the existing assets:

a) The total value of the property and other real property rights of the debtor and co-obligors is of a particularly small value in relation to the total delinquent underlying debt, and does not exceed five percent (5%) of the amount of the debt. The debt, in each case, is the amount of one hundred thousand (100,000) euros, where this value in turn results from the estimate of a certified appraiser, where available, or from the amount of the total taxable value of these debts. ENFIA account rights in accordance with Law 4223/2013, as appears from the latest tax assessment law submitted, or from the confiscation report. If the other conditions in the previous paragraph are met, but the total value of ownership and other real rights over the real estate of the debtor and partners exceeds one hundred thousand (100,000) euros, the remainder of the debt will be returned after deducting double its value. To apply the previous clause, uncollectible debts are classified according to seniority, from the oldest debt to the most recent, based on the time the debt was recorded in the receivables books.

b) That the total value of the transferred funds of the debtor and co-obligors is of a particularly small value compared to the amount of the total overdue underlying debt and does not exceed the amount of thirty thousand (30,000) euros, as this value results, in order, from the assessment of the certified appraiser or from the seizure report.

5. As an exception to the provisions of Paragraph (A) of Paragraph (1), debts are classified as uncollectible in the following cases:

A) If a period of not less than ten years has passed since the business of the debtor, whether a natural or legal person, was subject to a special liquidation procedure or from the liquidation of a legal person, and the current total value of the assets of the property is under liquidation, and the properties of the committed partners of persons are of a particularly small value in relation to the total debt. The late principal, which does not exceed five percent (5%) of the debt amount and in all cases the amount of one hundred thousand (100,000) euros. If the other conditions of the previous paragraph are met but the total current value of the assets of the property under liquidation and the funds of the committed partners exceeds the amount of one hundred thousand (100,000) euros, the remaining debt after deducting double the amount and the amounts are classified as uncollectible of their value, in accordance with the corresponding application of the third paragraph of Paragraph (A) of Paragraph (4) of this Article. In applying the previous sections, the value of the assets of the property under liquidation is calculated based on a certificate from the liquidator. As for the provisions of paragraph (4), they apply to the committed partners, and the provisions of this case apply to debts only incurred or reduced in time until the start of the liquidation process, regardless of the time of their approval. And it was announced therein.

b) If the debtor or co-debtor dies without leaving any money, and the surviving spouse or co-debtor is cohabiting, the debtor’s children as well as his willed heirs waive the encumbered inheritance. In this case, in order to describe the debt as uncollectible, it is not necessary to investigate and accelerate the collection process at the expense of the other heirs of the deceased.