The Insolvency Service has to date received 90 applications for debt relief, according to its head Giorgos Karotsakis.
Karotsakis told the Cyprus News Agency (CNA) the government service has begun cross-checking the data on the first 20 applications, while examination of the other 70 applications is currently at the initial stage.
Once an application is received, the service goes through it to check if the eligibility criteria are met. Next, the service contacts government departments and the applicant’s creditors to verify the financial information provided.
Where the service determines that an applicant qualifies for debt forgiveness, it requests on behalf of the applicant a debt relief order from the court.
Meanwhile the Insolvency Service has so far received just two applications personal repayment schemes (loan restructuring).
This is a small number, Karotsakis said, adding that an effort would be made to raise awareness of the scheme among the public.
The debt relief and personal repayment scheme came into force on August 7.
According to the Insolvency Service, people who are left with only €200 a month after expenses – calculated at €733.60 per person – have a vehicle worth up to €4,000, personal assets of up to €1,000, and professional equipment up to €6,000, are eligible to apply.
The calculated value of monthly expenses increases with each dependant.
Under certain criteria, up to €25,000 can be erased from bank debts and €2,500 from debts owed to the government and local authorities.
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 an order for debt relief.