Monday deadline for foreclosures
The joint House Finance and Interior Committees have given the government a week to respond and incorporate adjustments to the package of four pieces of legislation that comprise the law on foreclosures, the delays of which prompted the IMF tio suspend its payment of 86 mln euros as part of the bailout deal and postponed the arrival of Troika inspectors.
The parliamentary committees discussed the four bills presented by the government on Tuesday and asked that these be returned with amendments by next Monday, a day before the arrival of Troika officials, as regards the safety net for guarantors in the case of insolvency by the borrower and foreclosure of his property.
The four bills discussed by MPs related to the regulation of insolvency councilors, the examinership of restructured loans by viable businesses, an improvement on the regulations for receivership of companies and an amendment to the existing law on bankruptcies.
The new bill stipulates that after the passage of three years under review, the insolvent person is relieved of all his debts and no longer deemed insolvent, having surrendered his property, except for assets deemed necessary to him and his family. The insolvent person will also be obliged to surrender any amount from income beyond the basic amount needed for his family, to satisfy creditors over a three year period.
Also, the status of guarantors remains the same in the sense that any relief for the insolvent person does not relieve the guarantor.
The next mission of inspectors from the Troika of international lenders is now expected to return on January 27 for its sixth review of the financial assistance programme, having postponed its arrival when parliament passed a new bill that would delay implementation of the foreclosures bill until January 30.
The Troika mission will focus on the insolvency framework, a “critical priority” for the programme at this stage, an IMF source was quoted by the state-run Cyprus News Agency as saying last week.
“A full review mission will begin once the suspension of the foreclosures law is expired. This is the plan at the moment,” the source said.
The House wanted the government to submit a package of all five bills of an insolvency framework, which was scheduled to be put into force in January 1 to set up a safety net to protect vulnerable groups from foreclosure of mortgaged property.