Banks target 300,000 bad debtors
Some 300,000 debtors face measures that include the auctioning of their homes.
These are debtors and loan guarantors who, having failed to respond to letters sent to them by banks asking them to restructure their arrears, are now classified as noncooperative according to the banking sector’s Ethics Code. Such letters have been sent to 1.2 million borrowers and, according to figures from the banks, about a quarter of recipients have not responded.
Classification as a noncooperative debtor signals the start of legal action by the banks that can lead to home foreclosures. After the 2015 amendment to the 2010 Kat- seli Law, named after former economy minister Louka Katseli, which offered protection to overindebted households, even debtors who have requested protection under its provisions can no longer consider themselves shielded from such measures if their lender deems them noncooperative.
Data from banks show that 300,000 debtors have received the third letter of the process provided by the Code, having failed to make any debt payments in over a year. Banks have realized that most of them have loans without collateral (i.e. consumer loans and credit cards) while the large majority have no property assets.
Those who have requested protection under the Katseli Law may still see their homes auctioned.