Corporate Bankruptcy in Greece – Complete FAQ Guide

Bankruptcy applies when a debtor—whether an individual or legal entity—is in a state of payment suspension. Under Article 76(1), both natural persons and legal entities pursuing an economic purpose have bankruptcy capacity. Under Article 77(1): “A debtor is declared bankrupt when in payment suspension, i.e. when permanently and generally unable to meet due monetary obligations. Payments made by fraudulent or destructive means do not constitute fulfilment of obligations.” The Code entered into force on 1 January 2021, replacing the old Bankruptcy Code (L. 3588/2007), and consolidates all insolvency tools—out-of-court mechanism, restructuring, bankruptcy, and second chance—into a single framework.
→ Source: psarakislegal.com — Abusive Bankruptcy Petitions

The main requirements are payment suspension, i.e. permanent, general inability to fulfil obligations. Under Article 77(1): “A debtor is declared bankrupt when in payment suspension, i.e. when permanently and generally unable to meet due monetary obligations. Payments made by fraudulent or destructive means do not constitute fulfilment of obligations.” For small-scale bankruptcy, the payment suspension presumption (Art. 176) is triggered when a debtor fails to pay ≥60% of due obligations to the State/e-EFKA/credit institutions for ≥6 months and the unpaid amount exceeds the amount of €30,000. In a recent case (Athens Multi-Member Court 252/2025), an HR services company with negative net position of −€1,561,369.63 and a liquidity ratio of only 0.42 was declared bankrupt. The court found that “by common experience and reasoning, a general inability to meet obligations exists in this case.”
→ Source: psarakislegal.com — Multi-Member Court Decision (A.E. Bankruptcy)

The debtor can defend by proving the petition does not meet Article 77 requirements or is filed abusively under Article 80(2): “The bankruptcy court rejects the petition if it is proven that it is filed abusively. A petition is abusive especially if the creditor uses it as a substitute for individual enforcement proceedings or for purposes unrelated to bankruptcy as a collective enforcement institution.” The burden of proof rests primarily with the petitioner, who must prove the permanent and general inability of the debtor to meet obligations. At a secondary level, even where this condition is met, the court may find the petition abusive and outside the general framework of collective mandatory enforcement for proportionate creditor satisfaction.
→ Source: psarakislegal.com — Abusive Bankruptcy Petitions

If the petition is found to be abusive, the bankruptcy court may order compensation to the debtor if damage from the abusive filing is proven (Art. 80(3)). In EfPeir 74/2011, €5,000 in compensation was awarded due to harm to the petitioning company’s personality: the abusive petition expressed distrust of its economic entity and diminished its reputation in commercial and transactional circles. This demonstrates the seriousness with which courts treat good-faith obligations in bankruptcy proceedings. The creditor who files an abusive petition not only fails to achieve their goal but may also face financial liability for the consequences of their actions.
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Bankruptcy is declared by court order. Even with insufficient or difficult-to-liquidate assets, courts typically proceed with the declaration to protect creditor interests. In decision 70120/2025 of the Athens Single-Member Court: “Judges customarily order bankruptcy and the appointment of a trustee, even in cases where assets appear difficult to liquidate, especially where the debt amount is large, in order to safeguard creditor interests and allow the trustee to assess the legality of bankruptcy procedures.” Despite owning fractional shares in hard-to-liquidate horizontal properties, the court declined to order registration in the Insolvency Registry (Art. 178 InsCode).
→ Source: psarakislegal.com — Athens Single-Member Court Decision €14.5M

Small-scale bankruptcy (Articles 172-188 of Law 4738/2020) is for debtors with assets ≤€450,000, turnover ≤€700,000 and ≤10 employees. The procedure is simplified and implemented through an electronic platform. As provided in Article 173(1): “The small-scale bankruptcy petition is submitted electronically through the Electronic Insolvency Registry, where it is published for thirty (30) days.” If no intervention is filed within this period, the petition is accepted automatically. A deposit of €250 must be made to the Fund of Deposits and Loans. Law 5108/2024 abolished the Justice of the Peace courts, and the competent court for small-scale bankruptcy petitions is now the Single-Member Court of First Instance.
→ Source: psarakislegal.com — Small-Scale Bankruptcy Procedural Conditions

Yes. The Managing Director (CEO) is jointly and severally liable for tax and social insurance debts of the company: “It is well known to all who conduct business that the position of Managing Director involves responsibility not only to the company’s shareholders but also to the State and EFKA. For numerous types of taxes and social insurance contributions, the CEO of a corporation is held accountable and liable with their personal assets.” Taxes triggering joint liability include: income tax, withheld taxes (payroll), pass-through taxes, VAT, and ENFIA (Art. 49 L. 5104/2024, Art. 31 L. 4321/2015). This personal liability exists regardless of the corporate form and cannot be avoided by resignation if obligations accrued during tenure.
→ Source: psarakislegal.com — Discharge of Legal Representatives from State Debts

The representative is discharged (Article 195 of Law 4738/2020) 36 months after petition filing or 24 months from the bankruptcy declaration: “Based on this provision, the representative is discharged from all joint liability for obligations to the State and EFKA of the corporation that arose 3-5 years before the bankruptcy.” For discharge to apply, the CEO must demonstrate good faith, cooperate with bankruptcy organs, and not be responsible for acts causing or prolonging the bankruptcy. In a recent case handled by our firm, the Athens KEVEIS issued a discharge certificate for corporate debts of €992,880.91, consisting mainly of corporate income tax and VAT.
→ Source: psarakislegal.com — Automatic Discharge of Corporate Directors

Discharge benefits extend to the criminal sphere. Under Ministerial Decision 44510 EX 2021, “debts covered by the discharge are not taken into account for criminal prosecution of the representative for the offence of non-payment of debts to the State.” Furthermore, Article 198A of Law 4738/2020 provides that after irrevocable discharge, “the criminal offence for non-payment of debts to the State is extinguished.” This provision applies retroactively (Art. 263 para 6 L. 4738/2020) to cases predating the law’s entry into force. The combined civil and criminal discharge represents a genuine “fresh start” for directors of failed companies who acted in good faith.
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Law 4738/2020 (Articles 192-196) introduced automatic debtor discharge without requiring a court order: “For the first time in Greek law, the institution of automatic discharge of the debtor from remaining debts was introduced, without requiring a court decision as was previously required.” Discharge operates automatically after 24 months from declaration or 36 months from registration in the Electronic Insolvency Registry, unless a creditor challenge is filed within this period. In the €14.5M case, the court noted: “After three years from the bankruptcy declaration, the discharge of the debtor will occur, regardless of whether the assets have been liquidated or not.” This is a fundamental shift from the pre-2021 regime.
→ Source: psarakislegal.com — Automatic Discharge of Corporate Directors

Under Article 194 of Law 4738/2020, there are four categories of exceptions: (a) debts arising after the bankruptcy petition, (b) debts from death or bodily injury caused by fraud or gross negligence, (c) debts from money laundering activities, and (d) maintenance/alimony obligations. Law 5104/2024 (Art. 79) added debts from tax fraud, while Law 5222/2025 (Art. 174) excluded debts from smuggling. Essentially, the law excludes debts arising from deliberately illegal behaviour, preserving public order while allowing honest debtors a genuine fresh start. The burden of proving exclusion rests with the creditor seeking to resist discharge.
→ Source: psarakislegal.com — Athens Single-Member Court Decision

Under Article 193 para 1 of Law 4738/2020, there are six grounds: (a) fraudulent concealment of income or assets during the bankruptcy proceedings, (b) fraudulent causation of payment suspension, (c) bad faith conduct during bankruptcy, (d) pending criminal prosecution for economic crimes, (e) lack of cooperation with the bankruptcy organs, and (f) causing or prolonging the bankruptcy. Case law is gradually developing: Chios Court 18/2022, Patras Court 395/2022, Rhodope Court 26/2023. Law 5072/2023 introduced the institution of a confirmatory act issued by the Bankruptcy Rapporteur certifying the occurrence of discharge. The six-ground framework is exhaustive — courts cannot refuse discharge on grounds not listed in Article 193.
→ Source: psarakislegal.com — Automatic Discharge of Corporate Directors

During bankruptcy, the debtor retains certain assets as exempt. Tools and means necessary for professional activity are exempt. The debtor also retains a minimum living allowance of €6,448/year per ELSTAT or €15,000 annually (12× minimum wage), regardless of other income. Assets acquired after the bankruptcy declaration are not included in the bankruptcy estate and remain at the debtor’s disposal. Ownership of difficult-to-liquidate real estate does not necessarily prevent the declaration of bankruptcy. This exemption framework reflects the Code’s dual purpose: creditor protection and debtor rehabilitation through the “second chance” mechanism.
→ Source: psarakislegal.com — Athens Single-Member Court Decision

Restructuring is preferred when the business seeks to maintain operations and reorganise. A critical difference: in restructuring, any write-off of debts to the State and e-EFKA does not benefit jointly liable persons, such as the representative of a corporation, within the framework of restructuring, unless the creditor explicitly consents. By contrast, in the out-of-court mechanism, write-offs also benefit the legal representative. For a corporate representative bearing personal liability, bankruptcy combined with discharge under Art. 195 L. 4738/2020 may be the most effective solution. The choice between restructuring and bankruptcy therefore depends critically on whether preserving the business as a going concern is achievable and whether the representative’s personal exposure can be resolved.
→ Source: psarakislegal.com — The Mosaic of Debtor Options

The “Dendia Law” (Law 4307/2014) was a mechanism for rapid liquidation of over-indebted businesses. Creditors holding more than 40% of a company’s obligations, including at least one financing entity, filed a petition with the Court, and within a few months a decision was issued commencing the liquidation process. It was applied to landmark cases including DOL, MEGA, Skaramagkas Shipyards, LAZARIDIS S.A., and Axon. This regime has now been superseded by the current framework, which allows a creditor or creditors representing at least 30% of claims against the debtor — including secured creditors representing at least 20% of secured claims — to request (where the petition targets a business and does not concern a small-scale bankruptcy) the liquidation of all assets or individual operational units of the business.
→ Source: psarakislegal.com — Dendia Law: Rapid Liquidation

Law 4738/2020 introduced significant changes to the regulation of bankruptcy and insolvency in Greece. Key changes: (a) automatic discharge without petition (previously required court order), (b) consolidation of all tools into a single statute, (c) electronic small-scale bankruptcy procedure, (d) explicit representative discharge (Art. 195), (e) digital Electronic Insolvency Registry (EMF), (f) short timelines and digital asset liquidation, (g) European-style second chance system. The law fundamentally modernised the Greek insolvency system and aligned Greece with EU Directive 2019/1023 on preventive restructuring frameworks. It shifts emphasis from punishment of failure to orderly resolution and rehabilitation.
→ Source: psarakislegal.com — The Palette of Insolvency Code Solutions