We advised two private clients who were siblings in an urgent matter involving a defaulted loan and a property at risk of auction. One sibling owed approximately €500,000 under a loan in arrears, and the property securing it was close to seizure and judicial auction.
The Mandate
Our clients needed to prevent the auction, settle the debt on achievable terms and keep the property within the family.
Our Role
We negotiated a significant reduction of the outstanding debt with the lender, from approximately €500,000 to €200,000. We then structured a transaction under which the other sibling acquired the property for €200,000, with the price used to settle the reduced loan.
The main challenges were obtaining the bank’s approval for the restructuring and arranging for the debt to be paid by a third party. The result was two outcomes in one transaction: the debt was settled and the auction avoided for one sibling, and the other acquired the property at a substantial discount to the original debt.
Key Legal Issues
Lenders and servicers in Greece are often willing to agree to settlements when they are presented with a credible, funded proposal. Combining a debt settlement with a property transfer requires careful coordination of the bank’s approval, the release of the mortgage and the notarial transfer.
Why It Matters for Borrowers
Borrowers facing auction have more options than they often realise. Early legal advice and a structured proposal to the lender can protect the property and significantly reduce the debt.
For further information on debt restructuring and real estate matters in Greece, please contact our team.
