Insolvency Service secures debt forgiveness for 76 applicants

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By Stelios Orphanides

The head of the Insolvency Service Giorgos Karotsakis said that a total of 241 debt relief orders have been issued since it went in 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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About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • Vegchef

    I hope they checked the financial position of their ‘guarantors’ before wiping out their debts.

    • Cydee

      I suppose that would depend on whose friend he/she was…

  • Eye on Cyprus

    Surely the willingness to incur debt should include the obligation to service that debt.

  • SuzieQ

    I wonder what criteria are used when deciding to write-off a debt.

    • Eye on Cyprus

      Application forms available only in Greek, perhaps.

  • JS Gost

    If ever there was system made for corruption, misuse or abuse this has to be it. For years many were laughing all the way to the bank, now they are laughing at the bank, taxpayers and peopel who actually pay their debts back.

  • Costas Apacket

    I wonder how many of the ‘forgiven’ are not Cypriot?

    Answers on the back of a postage stamp please.