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Debt relief and foreclosures

While the Cyprus Insolvency Service has received four applications since the scheme came into force, it seems likely that the Bank of Cyprus will be the first lender to foreclose on property offered as loan collateral.

foreclosuresSPEAKING with the Cyprus News Agency earlier today, head of the Cyprus Insolvency Service Giorgos Karotsakis said that the Service had received four applications since details of the scheme were published on 7th August.

Mr Karotsakis expects that many more applications will be submitted soon as private insolvency practitioners have advised the Service that they are preparing applications for the scheme.

The scheme enables individuals with assets below €1,000 and a monthly income of less than €2,000 to apply to the court, via the Insolvency Service, for an “order of debt relief” of up to €25,000 – providing they meet certain criteria.

Mr Karotsakis also said that the Service had received two applications from borrowers who had authorised two insolvency practitioners to draft personal repayment plans.

Meanwhile is seems likely that the Bank of Cyprus will be the first bank to initiate foreclosure proceedings on properties pledged as collateral for around €85 million worth of non-performing loans.

Speaking to the Cyprus Mail by phone an anonymous source was reported as saying: “There are about 25 cases, all of them dating back to 2013 or earlier, for which a court decision has already been issued. In five days, bailiffs will start notifying both borrowers as well as guarantors that the foreclosure procedure will be initiated.”

The properties include “commercial properties and land”; no primary residences are affected.

The source added that the foreclosures are expected to take place at the start of September.

Readers' comments

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  • Steve R says:

    Typical of Cyprus businesses. Lead the client into a high risk situation with a promise of low interest rates. I got sold a Swiss Franc loan which was very attractive at the time. I asked my solicitor what would happen if things started to go wrong with the economy. I was advised that I could switch the loan to another currency at any time and it would only cost a few hundred pounds in administration costs. When things did start to go wrong I approached the bank who refused outright. The only way was to find another lender and pay off the loan. Guess what ?? nobody would touch it.

    Now the same bank are going to issue proceeding. Crazy situation. How does Cyprus expect do gain trust in the market when they go down this route. Even with a full title deed nobody would be interested in purchasing property in Cyprus. Those without title deeds do not stand a chance.

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