Greece can even service the current debts if they are allowed to borrow at lower rates. That's essentially what the 'bailout' was - the ability to borrow at lower costs to re-finance the debts. Even simply extending the bailout program without imposing new austerity would have been enough to let Greece recover.
And if we continue an analogy with a household, right now Greece has a steady job with enough income to cover the expenses for a fairly well-off lifestyle. However, it has also a crippling underwater mortgage. For a household the simplest way out of this would be a bankruptcy and a new start.
But OK, suppose that we put the interests of the Holy German Empire on the front. The problem is, austerity actually HURTS the creditors by undermining Greek economy. There's really no reasons for austerity except for sadism of Merkel.