The out-of-court debt settlement mechanism aimed to provide participating creditors with a functional environment to formulate proposals for the settlement of the debtor's debts and avoid the risk of insolvency, at the request of the debtor or at their own initiative. The goal was to create a credit-centric environment, rather than a debtor-centric one.

By creating an environment in which the participation of (a) credit institutions (banks), (b) leasing companies, (c) factoring companies, (d) debt servicers, (e) the public sector and (f) Social Security Funds would be important, it sought to make non-performing debts recoverable. In other words, the legislator prioritized the factors that would lead to a solution, rather than focusing on the difficult problem that had often failed to be resolved in the past.

Even before its launch, the new platform had already created high expectations among debtors, as it promised arrangements of up to 240 installments for debts to the State and Social Security Funds, and up to 420 installments for debts to financial institutions, along with a user-friendly interface for submitting applications. However, the first years of operation of the extrajudicial mechanism would be characterized as rather unsuccessful. Numerous technical issues plagued the platform's functionality, creditors were reluctant to participate in the process and provide the solutions required by the mechanism, whereas the algorithm creating the settlement schemes was leaving both creditors and debtors unsatisfied. As a result, both sides faced difficulties; debtors lost faith and optimism that this new mechanism, which essentially came to replace Law No. 3869/2010 (known as the Katseli’s Law), would become a ”shelter” for them, as the previous law had been for a whole decade.

However, the platform of the out-of-court debt settlement mechanism of Law No. 4738/2020 has made significant progress since its launch on 01.06.2021 and this time the legislator has made improvements. Unlike Katseli’s Law, where each of its amendments made the situation more difficult rather than more helpful, the amendments to the operation of the out-of-court mechanism proved to be beneficial. The process has been speeded up, creditors have started to behave more responsibly and have taken on the role that the law intended them to play, the algorithm has been improved and positive results have started to show.

Currently, the vast majority of the settlements proposed by the platform corresponds and reflects the real situation. The proposed settlements, now, largely align with both the debtor’s actual repayment capacity and the creditors’ realistic debt collection expectations, resulting in a growing number of settlement proposals being accepted and implemented. According to a press release from the Ministry of National Economy and Finance, the number of settlement applications submitted via the platform has more than doubled compared to previous months. This surge in applications is directly linked to changes and improvements integrated into the extrajudicial mechanism platform since February, following corrective legislative measures taken by the Ministry. Currently, the mechanism seems to create fair and sustainable settlement proposals, through an environment that does not oblige the parties to years of costly litigation procedures, and seems to be winning the battle with the Katseli’s Law, which is a positive development in the difficult and intractable problem of over-indebted households, non performing loans and accumulated debts.