Guarantor Liability and Release in Greece – Complete FAQ Guide

A guarantor is typically a third party — often a relative of the principal debtor — who, for largely gratuitous reasons, renders their own estate liable to the creditor’s claims. The object of the guarantee is the guarantor’s obligation to perform the principal debtor’s duty, in the event of non-performance by the latter. The accessory nature of the guarantee (principle of dependence) is fundamental: the guarantor is liable only to the extent that the principal debtor is liable.
Read more: Guarantor Liability in Bank Loans

The benefit of excussion (AK 855) is the guarantor’s right to refuse payment to the creditor until the latter has attempted compulsory enforcement against the principal debtor without success. Given the highly standardised format of bank credit facilities, standard practice entails the waiver of defences — the benefit of excussion (AK 855), guarantor release defences (AK 866, 867 & 868), and the benefits of Articles 862–864 AK. In short, the guarantor loses most legal protection at the point of signing. Nevertheless, protection endures through mandatory provisions of law.
Read more: The Guarantor’s Release Defence under Article 862 AK

Irresponsible credit extension to the principal debtor may result in the guarantor’s full release under AK 862. According to AK 862, the guarantor is released where the creditor’s fault rendered satisfaction from the principal debtor impossible — in particular, where the creditor neglects for a prolonged period to take legal action or register encumbrances over the principal debtor’s assets (cf. MCA Thrace 222/2016). Case law identifies the following actionable omissions: (i) failing to terminate and close the account promptly (MPC Rodopi 84/2024); (ii) failing to register a security interest; (iii) failing to bring a claim or obtain a payment order (MPC Rodopi 6/2023); and (iv) failing to file a rescission action to prevent the debtor’s property transfers (MPC Rodopi 97/2023).
Read more: The Guarantor’s Release Defence under Article 862 AK

Proof follows two stages. First, the guarantor must allege and prove the principal debtor’s supervening insolvency — typically evidenced by bankruptcy or any factual or legal state that prevents the creditor from being satisfied from the principal debtor’s assets. The incapacity must be supervening: it must not have existed at the time the debt arose. Further, the guarantor must prove the creditor’s fault standing in a causal nexus with the impossibility of satisfaction. MPC Athens 2483/2025 held: “the defendant displayed inactivity and indifference in collecting the claim, deviating unusually and particularly seriously from the conduct of the average prudent person, because it failed to ensure timely termination of the contract…the principal debtor stopped payments in 2011, termination occurred in 2017, and the payment order was issued five years later.”
Read more: Judgment MPC Athens 2483/2025 — Guarantor Released from €1.3M Leasing Debt

A prior waiver by the guarantor of the AK 862 release defence is valid only to the extent that the creditor’s inability to satisfy itself from the principal debtor arose from light negligence (AP 1216/2019). A waiver in respect of gross negligence or wilful intent conflicts with AK 332(1) and is void (AP 1137/2019). In the context of bank contracts, where the waiver clause was not individually negotiated, a waiver for light negligence is also void.
Read more: The Guarantor’s Release Defence (2021 analysis)

Guarantees provided by relatives of the principal debtor, driven by family and emotional motives, who assume obligations inconsistent with their financial position, without deriving any personal benefit, while the bank fails to adequately inform them of the extent of their obligations, are void under AK 178 and 288. As a general rule, a conflict with good morals may arise where there is a gross disproportion between the scope of liability and the guarantor’s financial position, particularly where combined with undue influence by a bank employee who downplayed the risk assumed under the guarantee.
Read more: Guarantor Liability in Bank Loans

Mistake as to a person’s attributes is material under AK 142 where, having regard to good faith and commercial practice, those attributes are so significant that the party would not have entered the transaction had they known the true position. The principal debtor’s creditworthiness constitutes such an attribute: where the guarantor relied on false representations as to the principal debtor’s creditworthiness and the creditor — being under an obligation to inform — failed to do so, the transaction is voidable.
Read more: The Guarantor’s Release Defence (2021 analysis)

The guarantors must be particularly vigilant when the credit institution proceeds against them by payment order, especially where supplemental deeds modifying the original contract have intervened. Subsequent amending agreements that go beyond a mere supplementation and modify material contractual terms may result in release. According to case law, converting a current-account credit facility into an instalment loan or changing the contract’s currency constitutes novation (AK 439) — the original obligation is extinguished and a new one created, and ancillary security (guarantee, pre-notation of mortgage) is simultaneously released unless freshly granted, specifically where the guarantor did not sign the supplemental deed. MPC Athens 822/2022 (€170,000) confirmed that a new contract with different parties and a different repayment method does not bind a guarantor who did not sign it.
Read more: Judgment MPC Athens 822/2022 — Guarantor Released from €170,000 Current-Account Debt

Under Article 868 AK, where the creditor’s notice of termination is required for the principal debt to become due, the guarantor may — once the principal debt has become due and one year has elapsed since the guarantee was provided — demand that the creditor terminate and judicially pursue the claim within one month. It should be noted that “judicial pursuit” means only filing an action or obtaining a payment order from the bank — not merely sending a formal extrajudicial notice. If the creditor fails to comply with the guarantor’s demand, the guarantor is released without any further act on their part — a statutory automatic release, arising by operation of law.
Read more: Guarantor Release Due to Delayed Termination by the Bank (AK 868)

This ground applies where the guarantor provided the guarantee on the assumption that a particular relationship with the principal debtor would continue — for example, as a company partner, shareholder, or spouse. Release is possible where the guarantor proves that the credit institution knew that the reason for providing the guarantee was that specific relationship, and that the guarantor contracted on the assumption that the relationship would remain active.
Read more: Guarantor Release Due to Delayed Termination by the Bank (AK 868)

It should be noted that, beyond defences relating to the validity of the guarantee itself, the guarantor has the ability to contest the very existence of the debt — regardless of whether the principal debtor challenges the validity of the debt (who, lacking personal assets, may have no interest in the outcome of the case) — relying, for example, on abusive or void terms in the credit/loan contract. It is logical for the guarantor to invoke all defences available to the principal debtor against the credit institution — typically relating to unlawful interest accrual or interest calculated under abusive terms.
Read more: Judgment MPC Athens 822/2022 — Guarantor Released from €170,000 Current-Account Debt

Once the guarantor has satisfied the creditor, the guarantor is subrogated by operation of law (AK 858) to the creditor’s rights to the extent of the satisfaction and is entitled to claim from the principal debtor what was paid. The creditor’s claim against the principal debtor is transferred by operation of law to the guarantor in the state it stood at the moment of satisfaction. In addition, all ancillary security rights (AK 458) transfer with the claim — pre-notation or mortgage over real property, other guarantees, and any priority rights in enforcement proceedings, etc. However, the guarantor loses the recourse right if they failed to raise valid defences they knew of or should have known (AK 853, 859).
Read more: Recourse Rights of a Guarantor Who Has Discharged the Debt

Where multiple guarantors secure the same debt, any one of them who satisfies the creditor may claim contribution from the co-guarantors to the extent of their recourse right (AK 860). Multiple guarantors (co-guarantors) are jointly and severally liable to the creditor, even if they did not assume the guarantee jointly (AK 854, 860 and 487 AK). Unless the internal relationship between co-guarantors provides otherwise, all are liable in equal shares (AK 487(1)). Moreover, under AK 484, a remission of debt in favour of one guarantor operates subjectively and does not affect the creditor’s claim against the remaining co-guarantors — establishing the legal feasibility of individual releases.
Read more: Recourse Rights of a Guarantor Who Has Discharged the Debt

The initial picture is that bank claims prescribe after 20 years. The detail that is frequently overlooked is this: the prescription period for loan claims is 20 years, unless instalment repayments are stipulated, in which case the period becomes 5 years and runs from the end of the year in which each instalment fell due and became payable (AK 250(15)). MPC Athens 3878/2025 applied the rule: “it is probable that all instalment-loan instalments…have fallen under the five-year prescription of Article 250(15) AK, which was completed on 1 January 2019, while the respondent did not activate, by notice of termination, the relevant contractual provision.”
Read more: Prescription of Bank Loan Claims — Time Limits for Borrowers and Guarantors

Because a payment order is issued without hearing the debtor’s side, it is a strictly formalistic procedure in which the creditor’s claim and its maturity must be evidenced in documentary form. The slightest formal defect may lead to the annulment of the payment order. Examples: a payment order was annulled because the complete movement of the account from the date of the original contract was not reflected. In another case, a payment order was annulled because the currency conversion documents were not produced, etc.
Read more: Annulment of Payment Orders Against Guarantors

Sound legal management of the case can lead to swift release through the following steps: (a) filing well-founded legal proceedings against the payment order; (b) presenting to the credit institution a detailed account of the guarantor’s financial position and objective inability to satisfy the debt, together with the legally valid and conceptually available possibility of individual guarantor release without prejudice to the institution’s interests; (c) achieving a beneficial settlement through withdrawal of the well-founded proceedings as “consideration” for the release granted. Under AK 484, a remission of debt in favour of one guarantor operates subjectively, leaving the institution’s claim against co-guarantors intact — the foundation for every viable individual settlement.
Read more: Individual Guarantor Release — Subjective Operation of Debt Remission