March 2025

Decision of the Single-Member Court of First Instance of Drama on Debt Discharge after Bankruptcy

Decision No. 10/2025 of the Single-Member Court of First Instance of Drama was issued, confirming the discharge of our client, a natural person, from debts amounting to €153,562.23 to their creditors. This discharge was granted due to the expiration of three years from the registration of their name in the Electronic Solvency Register (Η.Μ.Φ.), in accordance with Article 192 of Law 4738/2020, following the submission of a relevant application.

This decision is among the first issued under Law 4738/2020, as the three-year period is now expiring for the first bankruptcy applications submitted in 2021-2022.

With this ruling by the Bankruptcy Judge of the Court of First Instance of Drama, our client's debt discharge was confirmed, despite the fact that the law does not explicitly provide for such cases where registration in the Η.Μ.Φ. is ordered. Until now, the possibility of issuing a declaratory act of debt discharge has been explicitly provided only for bankruptcies where a bankruptcy trustee has been appointed. However, despite this apparent limitation, it is accepted—and should be accepted—that the issuance of such a declaratory act also applies to cases where registration in the Η.Μ.Φ. has been ordered, without requiring a trustee’s report, as is necessary in cases where a trustee has been appointed (see P.Eis.Pt.P.Thes. 536/2024).

It is worth noting that an upcoming bill by the Ministry of National Economy and Finance on capital market enhancement will amend paragraph 4 of Article 192 of Law 4738/2020, explicitly providing for the issuance of a declaratory act of debt discharge in cases where registration in the Η.Μ.Φ. has been ordered. Consequently, debtors' discharge due to the expiration of three years from their registration in the Η.Μ.Φ. will henceforth be confirmed without any doubts regarding the existence of this right. This is particularly important, as until now, some applications for the issuance of a declaratory act of debt discharge have been rejected due to ambiguities in the current legislation.

It is, therefore, evident that the bankruptcy framework established by Law 4738/2020 indeed provides a second chance and the opportunity for a fresh start. Furthermore, continuous legislative improvements are being introduced to enhance its efficiency, as confirmed by the forthcoming amendment to paragraph 4 of Article 192.