The Greek authorities are planning to introduce to the country’s judicial system the institution of individual insolvency, in which a person is able to declare bankruptcy, liquidate his or her property and receive a second chance in life, free of debt — but without retaining any personal wealth.
This institution, widely known and used for many years in the Anglo-Saxon world, is about to replace the already-existing scheme which protects the main residence of Greek citizens from foreclosure.
This aspect of the plan has led to negative reactions, which have already began to spread.
The Greek government has announced that from May 1, 2020 onward, the law which protects one’s main residence from the auction block will be scrapped; those who meet the criteria to enjoy the protection of the currently-existing law have until April 30 to apply to safeguard their primary residences.
The current scheme will be replaced by a system of individual insolvency, in which an individual will be able to declare bankruptcy, lose all of his or her possessions and then apply for the total removal of any remaining debt.
This procedure will also include the primary residence of the individual, meaning that he or she and their family could lose their only house, something which is nearly unthinkable to many in Greece based on the present practice of total protection of primary homes up to a certain value.
However, the government has said that it will also introduce a scheme that will protect the most vulnerable from becoming homeless, most likely by subsidizing their rent, after their home is taken by the bank.
However, political parties and social organizations have already began reacting negatively to this prospect, claiming that Greek society is not ready to see scenes of families being forcefully evicted from their own homes due to economic hardship.
There are still no details on the exact specifications of the new system which will replace the primary-residence protection scheme which is currently in place. However, it is almost certain that the government’s initiative will face some serious criticism in the coming months.