Insolvency Protection Laws In Cyprus That Help Individuals Own Property Even After Bankruptcy
The number of bankruptcies in Cyprus has greatly decreased to a record low of 37.000 persons according to CIEC’s most recent reports. This comes as no surprise following the help from amended laws that aim to help previously declared bankrupt or insolvent individuals and companies to get back on their feet. It should be known that the law protects individuals who had been previously declared bankrupt’s and also enables them to invest in or secure property.
Protection Of Individuals and Companies Under The Law
In Cyprus, a person is declared insolvent under the law if he or she is unable to clear debts and commits fraudulent acts stipulated by law to escape payment. This deems them unprotected from their debtors and in other circumstances subject to public examination. A public examination is a situation whereby the debtor’s full information on property and assets are disclosed. This includes the knowledge of land and estates and their value estimates made known to the court. If conducted or deemed unnecessary, the debtor can apply for the discharge or annulment of his adjudication. This protection provision, although different from other protection laws for individuals declared bankrupt, is flexible and gives freedom to the debtor.
Lands and Estates For Individuals
You are able to legally keep your land and estates without forceful actions by your creditors once successful in these procedures. Another issue arises when one acquires inheritance within the period before their record is discharged from bankruptcy. While you may choose to rewrite your money, land or investments in shares end equities to your own next of kin, costs incurred in the process are very high. A loophole advantages those without an appointed trustee as they are the only ones who are allowed to take procession of your property to pay your creditors. Inherited money, land, and estates can be held for your sole benefit if the demise of the involved party comes after discharge from bankruptcy.
Lands and Properties For Companies
The same applies to Cypriot companies which also have the choice to apply for voluntary reorganization. This constitutes four-month protection of the debtor from creditors to make arrangements to compromise or alter arrangements with consent from creditors. There are two types of the same. One which allows alterations of the company’s constituent provisions of policies, shares and debentures, liabilities and other arrangements stated and agreed upon. The second is an examinership that gives the company protection of property and any creditor actions to allow them the opportunity to put their financial affairs together. A company is able to keep its most valued property including land, equipment, and vehicles without liquidation. The examiner can request a 60-day extension following the four months.
Second Chance After Bankruptcy
The law now provides for the automatic restoration of the debtor after a maximum of 3 years. This was put in place to assist businesses to get back on their feet and to help people from losing their jobs as said by Vice President Frans Timmermans. The amendments made also provide for the relief of up to €25,000 if his/her assets were valued under €1,000 and a monthly income of less than €200. This gives those with less to no assets such as vehicles or valuable land with buildings a chance to rebuild their lives without the hostage situation that had remained unresolved in the previous regime. The one in place now gives the debtors a fleeting chance to protect themselves against the creditor.
Getting Mortgages After A Declaration of Bankruptcy
With the protection provided in the new Cyprus insolvency laws, you can maintain a job well within your rights as it protects you from discrimination. Banks, however, tend to keep a record of credit scores of its customers even after they are given a second chance. Mortgages are also acquirable after bankruptcy depending on different lenders who will grant it to you at different stages according to Finder.com. Mortgages are mostly given at good rates after a period of 5 to 6 years from discharge. You are also able to get a buy-to-let mortgage. Remortgages can be done after three years of bankruptcy even with less than €1,000 in equity. This allows you to keep your home without your trustee selling it.
In Cyprus, individuals and businesses can restructure their financial strategies to build a better way to resolve their debts while maintaining property ownership and the jobs provided to employees. This has given an alternative to the unnecessary liquidation of valuable assets that might help them get back on their feet after bankruptcy declarations. For any and all individuals, creditors versus debtors have their rights now balanced in Cyprus.
Written by: Alicia Rennoll
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