Cyprus Mail

Insolvency Service secures debt forgiveness for 76 applicants

The head of the Insolvency Service Giorgos Karotsakis said that a total of 241 debt relief orders have been issued since it went into operation in May 2015, and courts ordered the protection of debtors in 25 cases, the Cyprus News Agency (CNA) reported on Tuesday.

So far, the Insolvency Service received 1,200 applications from debtors requesting the forgiveness of outstanding debt of up €25,000 and 76 applications have been submitted to the court seeking protection, Karotsakis said according to the CNA. He added that while the above figures are not satisfactory, as it does not reflect the dimension of the problem, even as the Insolvency Service is trying to inform the public with manuals and an upgraded webpage.

Meanwhile, he continued, the Ministry of Energy, Commerce, Industry and Tourism, the Insolvency Service, the Ministry of Finance and the Central Bank have set up a task force to evaluate the effectiveness of the body which had even less success in the case of helping cash-strapped companies avoid liquidation, he said. The European Bank of Reconstruction and Development (EBRD) financed the evaluation of the Insolvency Service’s effectiveness and staffing by accounting firm Ernst & Young.

Courts received examinership applications from only four companies seeking to have their debt restructured, Karotsakis said according to the CNA. The courts rejected two of the applications and are still reviewing the rest. As a result, the Insolvency Service launched a campaign together with business groups to inform companies.

“Although no statistical figures are available, there are indications of a large number of companies facing financial problems, which could become viable saving jobs,” Karotsakis was cited as saying.

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