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Insolvency service receives first applications

The Insolvency Service has received its first applications for debt relief, its chief, Giorgos Karotsakis, said on Tuesday.

Karotsakis said the Service has received four applications, a significant number considering that the scheme only came to force on August 7.

He added that he expected many more applications to be submitted soon. Private insolvency officers have notified the Service they were preparing applications for this scheme.

With regard to the personal repayment schemes, Karotsakis said the Service received two applications from borrowers who have authorised two insolvency practitioners to draft a personal repayment plan.

Under certain criteria, borrowers are eligible for an up to €25,000 debt forgiveness from banks, and up to €2,500 on tax dues.

As part of the personal insolvency laws, individuals with assets below €1,000 and monthly income below €2,000 may apply to the court via the government insolvency service for an “order for debt relief” of up to €25,000.

A borrower may file a request for debt relief, along with a sworn statement, with the government’s insolvency service.

If the insolvency service is satisfied that the applicant meets the criteria set out under the law, it then issues a certified statement and the borrower will be represented in court for the issuing of a debt relief order.

Unless the creditor (bank) responds within 21 days of the filing of an application, the court will by default issue a debt forgiveness order.

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