Get out of debt legally in Italy: effective strategies and solutions

Being overwhelmed by debt can feel like a hopeless situation.
The pressure from creditors, the constant deadlines, and the fear of legal consequences can turn life into daily stress.

Fortunately, Italian law provides official legal tools that allow individuals to manage or cancel debts and rebuild financial stability. These procedures are available even to foreign residents in Italy, under specific conditions.

From time to time, the Italian government also introduces special tax relief programs, commonly known as “condoni” or “rottamazione delle cartelle esattoriali”.
However, such programs are temporary and limited in scope, whereas the judicial debt relief procedures provided under Italian law are more comprehensive and permanent, offering a structured and legally recognized way to address personal over-indebtedness and start anew.

In this article, I’ll explore how to resolve debt problems legally in Italy, focusing on the solutions available to private individuals under the Italian Law.

“When you get into debt, you become a slave.” – Andrew Jackson

Solving debt problems through legal procedures

In recent years, many individuals and families have faced serious financial difficulties due to recurring economic crises.

To support those unable to meet their obligations, the Italian government introduced several relief measures, including debt restructuring and insolvency procedures designed to help people in financial distress find a sustainable and lawful solution.
These mechanisms fall under the Italian Insolvency Code and, specifically, the rules governing over-indebtedness (sovraindebitamento).

The main goal is to give honest debtors a fresh financial start, while ensuring fair treatment for creditors.

To qualify for these legal solutions, you must be a consumer — that is, a natural person who acts for purposes outside their business, trade, craft, or professional activity. Anyway, recent legal reforms now allow access even if part of the debt comes from previous business activities.

Once eligible, with the assistance of a lawyer, the debtor can contact an OCC (Organismo di Composizione della Crisi) — a public body that assists in preparing the necessary documentation and submitting the case to court.

Main debt relief procedures available

There are several legal ways to handle over-indebtedness in Italy:

✅ Consumer Debt Restructuring Plan

Available to consumers who:
– have not been discharged (esdebitati) in the past five years;
– have not already benefited twice from debt discharge;
– have not caused their debt situation through serious fault, bad faith, or fraud.

With OCC assistance, the debtor may propose a repayment plan to creditors and request the suspension of enforcement actions (such as wage garnishments or foreclosures) to make the plan effective.

✅ Controlled Liquidation of Assets
If restructuring is not possible, debtors may opt for controlled liquidation of their assets.
A court-appointed liquidator sells the debtor’s assets and distributes the proceeds to creditors according to the law.
This procedure can also be used by professionals, farmers, innovative start-ups, and small businesses that do not qualify for regular bankruptcy proceedings.

✅ Family Procedures
If several members of the same family share debts or have a common financial origin (e.g., a joint mortgage or car loan), they can file a single joint application instead of multiple individual ones. This approach can reduce costs and time, and helps design a solution that fits the needs of the entire family.

Being in debt does not mean being without options.
Italian law provides clear and legitimate ways to restructure, reduce, or even cancel debts, allowing individuals and families to start over with dignity and legality.
If you are struggling with debt in Italy and want to understand which solution best fits your case, contact me for your personalized legal advice.