"Second Chance Mechanism": When Does The Debtor Forfeit The Discharge

(republished from Euro2day.gr)

Summary:The most common cases in which a debtor is brought back to court. When they are justified, what happens in courtrooms, and the critical criterion of "honesty."

About five years ago, the Greek legislator incorporated the EU Directive (EU) 2019/1023 and the institution of the "Second Chance" into the Greek Bankruptcy Code (Law 4738/2020). The core idea is this: debtors are now given the opportunity to file for bankruptcy with the aim of being fully discharged from their debts within a period of 1 or 3 years (alongside liquidation of any assets).

The ultimate goal is a new, "clean" start.

However, the liberalization of discharge does not mean amnesty for every type of behavior. The "second chance" is strictly intended for the "honest" debtor. For this reason, creditors may file objections, citing, among other things, fraudulent bankruptcy or bad faith behavior by the debtor, in order to prevent the discharge.