In Landmark Case, Greek Court Writes Off Employed Bank Customer's Debt

Tyler Durden's picture

Think filing for bankruptcy is the only way to get debt discharge? Think again, at least in Greece. While previously we have reported that Greek courts had written off "untenable" debts of unemployed Greeks owed to local banks, Kathimerini describes a landmark case which may have profound implications for the indebted country, in which a fully employed woman has had the bulk of her debt written off. From Kathimerini: "In what could turn out to be a significant ruling for Greeks suffering from the economic crisis, a court in Hania, Crete, has become the first in the country to order that the majority of the debt owed to banks by someone still in full employment be wiped out. Sunday’s Kathimerini understands that the Justice of the Peace Court in Hania based its decision on a 2010 law that allows judges to give protection to people struggling to meet their financial commitments. Until now, the legislation has only been used to give debt relief to unemployed people or those with no substantial income." This means that virtually every indebted person in Greece, regardless of employment status will rush into court rooms, demanding equitable treatment and a similar debt write down. It also means that the Greek bank sector, already hopelessly insolvent, is about to see its assets, aka loans issued to consumers, about to be written off entirely. And since the ultimate backstopper of the entire Greek financial system is the ECB, the creeping impairments will have no choice but to impact, very soon, the mark-to-market used by both the ECB and the various national banks. Finally, how long before other courts in Europe express solidarity with their own citizens and proceeds with similar resolutions?

On the specifics of the write off:

in the Hania case, the court ruled in favor of a full-time civil servant. The divorced woman, who has three children, asked to be given protection after her banks refused to offer her new terms for combined loans of 112,000 euros. The unnamed woman explained that she did not have any assets she could sell to pay off her debt.


In its ruling, the court deemed that the woman, who has moved in with her parents, needs 350 euros a month to cover her own costs but that the rest of her earnings could be distributed equally among the three banks she owes money to. The judge deemed that this process should last for four years, meaning the woman would pay back some 30,000 euros and the remaining 82,000 would be written off.

And the implications:

Thousands of people have already appealed to the courts for protection under the 2010 law but legal experts believe the decision in Hania may lead to a new wave of appeals by Greeks who still have jobs but are unable to repay their loans.

Needless to say, this simply means that as locals realize that a domino effect in which bank assets are written down will necessitate a collapse of bank balance sheets, and the asset side of the ledge will be unable to support deposits held by local banks. Which is unfortunate as December saw the first modest signs of a rebound in Greek deposits, which rose modestly from €173 billion to €174 billion following years of consecutive declines.

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redpill's picture

Code blue! Nurse, bring the crash cart!

ACP's picture

So which lucky German gets to take over that debt?

Mr Lennon Hendrix's picture

The Banking Cabal is not going to be happy about this one.

Manthong's picture

The judge might end up swimming with the fishies in Souda Bay.

Hugh_Jorgan's picture

Seems to me that this woman would have been in debtor's prison 100 years ago, not walking away with her debts obsolved. Seriously?

You want austerity? This is where the "State" should get it's labor force, throw all of the credit junkies in jail and let them work off their debts. No more pensions, no more fat bennies. Sorry folks you're on your own....

memyselfiu's picture

I'm guessing the huge organ your name refers to isn't the one between your ears....

edwardscpa's picture

It sounds to me like an insolvent person filed for Bankruptcy protection.  The horror.  Next.

Harlequin001's picture

I'd like a pound of flesh please...

Charity, fuck it.

How the hell is anyone supposed to get their money back in Greece? All you have to do is sit on your arse, get fired and have your debts wiped.

Hang on, now you don't even need to do that. All trade based on lending should now effectively cease...

edwardscpa's picture

It sounds to me like an insolvent person filed for Bankruptcy protection.  The horror.  Next.

Harlequin001's picture

Hang about. If I file in Greece, does that also apply to debts owed in other parts of the EU?

If it does all I can say is Athens is nice this time of year, or so I'm told...

Hugh_Jorgan's picture


Nice 8th grade insult. Tell you what Chief, I'll give you an example of real stupidity to set you straight:

Stupid is siding with the ignorant fool who believed that Government free lunches would never end. And worse, acted upon that lousy assumption by contractually agreeing to carry massive debt obligations all while assuming that nothing bad could EVER happen that could endanger their ability to pay. That is stupid, and that is your position.

It is called honoring a contractual obligation, ever hear of it? And don't give me; "the Banks (or Government) are doing it so it's ok to reneg" If we don't accept that crap excuse from our kids, we can't accept it anywhere.

People failing to uphold their individual responsibilites is what caused this mess. We can't advocate for more of that as a solution unless you really do want a full on global collapse which will be cool to watch for... about 72 hours. Then everyone's life changes for the worst on an indefinite timetable.

ForTheWorld's picture

Perhaps it's time to have many contracts re-written, so they provide a more equitable result for all? For instance, why should people pay double the purchase price (principal + interest over 30 years) of a home, just so they can have a home that they can call their own after that 30 years of payment? I understand there is a cost to the bank for lending out that money, but seriously - does it need to be that much?

Just because the contracts are written like that now doesn't mean they always have been, nor does it mean they should be written like that.

DrunkenMonkey's picture

Double the money you borrowed over 30 years equals around 3% a year (or less on a compound basis).

So how much would you ask to lend your earnings to your neighbour ?

Less than 3% ? If you say yes, I call bullshit.

sansnobel's picture

Hey, the way I see it as intrest rates are designed to define risk.   It seems to me the dumb ass is the "quasi" private bank that lent the money in the first place to a person or a government or another bank or any other commercial risk....they miscalculated the risk dramatically period...Why?  Because they have the government telling them what they have to do with their "private" capital. Same shit with the government in the US, Fannie Freddie it is all one big moral hazzard circle jerk..In case you have not noticed this yet....."Banks" or what ever you want to call them are not private enterprises anymore...they are "protected" institutuions or extensions of government which launder money for the governments they represent at the same time trying to balance the "needs" of the private economy when it comes to the expansion and contraction of credit all the while enriching themselves at the fiscaly responisble's expense.  Banks are basically a form of government sanctioned legalized plunder, so excuse me for saying this but it takes two to create moral hazzard and they have done such a fine job of it in Europe with the Banks being treatied like a fukin public utility...The US is in the same shape if not worse, it just looks less fragmented and more hopeful in the US because we are not as messed up politically as in Europe and we have the Chief of Moral hazzard in Charge at present at the Federal Reserve trying to force money to flow where it really should not go right now from a purely economic standpoint. Prices are better than central planners at clearing markets so the Banks need to relesae the inventory and let the chips fall where they may. How can you possibly think that a monetary Union could happen before you had some kind of fiscal union binding "All States" together in one great big circle jerk of a ponzi like we have here in the good ole US of A.....?  With every Central bank on the planet having no restraint what's to stop the next credit binge???? They didn't seem to have a fuckin clue about the last big one with housing in the US did they?  No, cause they don't care about bubbles.  All they care is about doing what their political lap dogs tell them to do ...Or else...  So Banks are complicit in the whole don't be fooled by the whole the devil made me do it story that Jamie Dimon or Lloyd Blankfein would give you.  They are men or at least they claim to be so if they see the moral hazzard with the government doing what they have done to Banking then Why the fuck are they not using the pulpit to point the finger at Government and the moral hazzard of the entire system?  Because they would be out of a job because they are terrible managers of risk and they have no morals themselves....

rayduh4life's picture

Is that going to include The Donald, CEO's of bailed out banks and other corps?  Or is your debtors prison only going to be for the little people  - so as to keep costs "down"?

Prairie Fire's picture

I'm with you 100%.

Lazy credit sucking crybaby socialists are the real evil. They'll take whatever is being handed out, and when the handouts end, they'll steal. Now it appears that when the stealing ends, they just go to court to have the debt removed legally--so they are free to once again find a place in the handout line up.

Unions make me sick.


Archduke's picture

*debt prison*?  are you seriously advocating this? 


this is not one or two bad apples. if the majority of citizens are struggling to repay their debt burden,

then the banks and mortgage lenders wantonly and massively mispriced risk and need to eat their shirts.

Bravo.  at the same time institutions and state corporations need to be privatised to trim excess fat

and jobs must be created in infrastructure to restore productivoty and employment, but the key here

is choice. some may decide to go into business on their own, and for that you need sensible credit,

which means writing off the inflated toxic crap.


the consumer paidgood interest, for the privilege of the banker taking on the risk. debt prison? -ok

it's not a crime to be a consumer filled with hopium.  however it certainly is a cime (fraud is a felony)

to willfullly inflate the consumer's credit capacity, to lie about it's rating when you retrance the CDO,

to turn around it short it up the backside while selling it as gold to happless pension funds. all are frauds.

so if you wangt to jail anybody, start with the bankers.  the  broke their codes of conduct and the law.



Richard Chesler's picture

Vaporization, it's not just for cockroach bankers!


BlackholeDivestment's picture





                                        2012 2012 2012 2012

                            2012 Cockroach Vaporization ACTA 2012 


                                                    of the  

                                             New World Order



Azannoth's picture

The Social System is a complete farce, I pay hundreads of euros per month in Health insurance fees(the mandatory minimum) now that I went to a Dentist I had a choice of either Paying hundreads more(per tooth) for premium materials and care or go with the government refunded (toxic)crap that would fall out after a few months and/or give me cancer(this is pretty much how the Doctor described it to me).

So in effect I pay thousands of euros per year so that unemployed bums here in Germany(and soon all over Europe) can get Free Healthcare, FUKC THIS SHIT!

aleph0's picture



The "Social System" really is social  ...  for those that operate it.

#1 For every ONE doctor in Germany , there is at least ONE  Civil Servant employed.

#2 For every ONE person working on the Rhine , there are THREE Civil Servants employed ( Rheinschiffahrtsamt ).

BTW ... #1 was mentioned by the Press Speaker for the NRW Doctors Association on TV a few days ago.
I consider the number to be AT LEAST DOUBLE.


Stroke's picture

When you pay the minimum you get the minimum


suck it up.....George Washington had woden teeth.

Azannoth's picture

Not when your minimum is 15% of your total income(before taxes), if I didn't have to pay it my cash on hand would go up by 28%! and than I could easily afford the best dental health care money can buy(but now I have to choose, how ironic is this!)

Real Money Wins's picture

Actually this is incorrect, John Greenwood who was Washington's Favorite dentist made several sets of false teeth for him but they were not wooden. Instead they were made from hippopotamus and elephant Ivory. None of Washington's false teeth were ever wooden.

Dermasolarapaterraphatrima's picture

azannoth, read Kotlikoff's book The Coming Generational Storm. He talks about this very real access to health care anymore. Same is happening in usa where M/M pays so little to doctors, I read fewer and fewer will take those medicaid or medicare patients. So although these people have "insurance" they have no meaningful access to health care anymore.


tamboo's picture

it's a shakedown that never cures anything, just keeps you buying overpriced pills for as long as possible.

take back your health:


Natural Cures for Ailments from A-Z - Earth Clinic
Kaiser Sousa's picture

hell yeah!!!

Funk all bankers bitchez!!!!

thats what ive been talkin bout...................

Mr Lennon Hendrix's picture

We want the funk!

Stocks crashing....

Kaiser Sousa's picture

"we gone turn this mutha out...."

Kaiser Sousa's picture

arrows down surely indicates we got some banker jock riding whores on the troll...

ya'll got something to say then step up...dont hide behind the red arrow...punk asses

Chump's picture

Now here's one European trend I do hope jumps the pond.  I'm loading up the credit cards in anticipation!

JR's picture

While Gingrich and Romney are busily trying to destroy the GOP brand, not all of the Obamas are rushing to take advantage of this political PR debacle.

Michelle Obama, aka Marie Antoinette, frantically trying to get her “piece of the pie” before the Man of Hope is returned to Chicago, is this morning’s happy newsmaker.

The UK Telegraph reports that luxury lingerie chain, Agent Provocateur, boosted its sales by 12.5% after a report ((rumor?) that Michelle spent $50,000 at the store after a recent shopping spree (Agent sells handmade Calais lace corsets for up to ?900), closing off part of Madison Avenue while she shopped.

The White House claims the story is 100% false.

Chump's picture

Wouldn't this be better left at the UK Telegraph??

JR's picture

It's spreading throughout the country. It's too late to take it back...

Chump's picture

I'm not questioning the worth of the article; I'm questioning its relevance both to my comment and ZH's article.  Can you elaborate?

JR's picture

Just thought you might have been interested in how the pros do it, while “loading up the credit cards in anticipation!” I don’t know if Agent Provocateur sells men’s lace underwear, but I’m told they do take credit cards…

Chump's picture

Well, it's the thought that counts.  I'm more likely to stock up on various types of metals, although maybe there would be room for a manthong or three...

macholatte's picture

America is just downright mean.
Michelle Obama

For the first time in my adult lifetime, I am really proud of my country. And not just because Barack has done well, but because I think people are hungry for change. And I have been desperate to see our country moving in that direction.
Michelle Obama 



Matt's picture

We're going to make America skinny again, one way or the other!

Zola's picture

its time to default on the debt and bankrupt some banks already... what are people waiting for ??

Kaiser Sousa's picture

waiting for the courage to be free at any cost.....

GeorgeHayduke's picture

Freedom is scary to most people. Most people are like cattle in a feedlot. Even if the gate to the freedom of the pasture were left open, they would remain in the feedlot. They know nothing else and the unknown is some scary shit to them!

GeneMarchbanks's picture

'The unnamed woman explained that she did not have any assets she could sell to pay off her debt.'

Luckily we have the ingenuity of hyper-hypothecation so we might run out of collateral but not promises.

scatterbrains's picture

another reason to accumulate gold on the down low.  At some point when the reset comes you'll have no assets of record, this way maybe you'll qualify to be a sorta out patient fema camp patron. Check in for some grub and clothes and check out for the blow and hookers.

alexanderstollznow's picture

i am constantly bemused by the way ZH produces interesting material, then just makes a joke of itself with its excess.  before extrapolating this story to 'ECB to pay for the bank debts of every Greek citizen', do you think that maybe a decision by a JP in Outer BuFu state in Greece, might perhaps be overturned or limited by some later process in the Greek court system??

NotApplicable's picture

You just described the EXACT same event that Tyler did, genius.

In other words, Tyler speaks of one side of the fight this will create, while you speak of it from the opposition's perspective.

See, it's not the action, but as always,  the reaction that matters. Which, I'm guessing, is why Tyler chose to make this post.

Thanks for playing along.


Manthong's picture

Maybe, but every judge in Greece has got to be thinking "uh-oh" right about now.