Cyprus Mail

MPs aim to vote on insolvency bills by April 2

By Elias Hazou

LAWMAKERS hope to wrap up discussion of the fifth and last bill comprising the insolvency framework by Monday or Tuesday, so that the set of laws can go to a vote to the plenum by April 2.

MPs on Thursday went over – article by article – the fifth insolvency bill, which deals with the protection of primary homes, business premises and guarantors’ obligations to the principal debtor.

“We are about 50 per cent through it,” DIKO MP and chairman of the House finance committee Nicholas Papadopoulos told reporters.

The House finance and interior committees would put in all an all-day session on Monday and Tuesday if necessary, to finish their work, he said.

April 2 is also the date on which the foreclosures law – which the opposition has repeatedly blocked – comes into force.

DIKO has said they will not block the foreclosures legislation again if the insolvency framework is ready and they are satisfied with it.  The combined votes of DIKO and ruling DISY would ensure that the foreclosures law cannot be frozen anew.

Discussion on Thursday focused on provisions dealing with debt forgiveness for borrowers in the red up to €15,000.

To be eligible for debt forgiveness, persons must have disposable income of €100 and assets worth up to €400. As the bill stands, borrowers whose debt is cancelled will be monitored for a period of two years. If their income goes up during this time, 50 per cent will go to the Insolvency Service, which in turn will turn the cash over to the banks.

The opposition parties want to strike the two-year monitoring clause.

Government officials told MPs they are willing to consider their proposal, but this would have to be negotiated with Cyprus’ international lenders.

Meanwhile the Cyprus Land Development Corporation (KOAG) said on Thursday it would implement a scheme to assist low-income families with their mortgage payments so that they do not lose their homes.

Speaking on the state broadcaster, head of KOAG Charalambos Petrides said the organisation will subsidise the interest payments on mortgages for primary homes worth up to €250,000.

The implementation of effective foreclosures legislation is a crucial requirement of Cyprus’ bailout deal, as it is a key tool for recovering banks’ non-performing loans (NPLs).

NPLs currently account for around 50 per cent of all credit.

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