Filenews 23 October 2022 - by Eleftheria Paizanos
A second chance to hundreds of businessmen who are trapped in their debts, so as not to be driven into bankruptcy, gives the package of bills that was tabled on Thursday in the Parliament. At this time, the new legal framework is as necessary as ever, as many businesses are ravaged by the coronavirus pandemic and the war in Ukraine.
The bills will transpose into Cypriot law the European Directive on preventive restructuring, discharge of debt, incapacities and disqualification of debtors. At the same time, measures to improve these procedures are included.
In particular, it ensures that viable businesses can be fully discharged of their debts after a reasonable period of time, adding that the efficiency of insolvency restructuring and debt relief procedures will also be improved.
The bills amend the Companies, Bankruptcy and Insolvency Department laws to complement the existing insolvency legal framework. Among other things, the bills provide a second chance to bankrupt entrepreneurs and the discharge of insolvent entrepreneurs from their debts. This includes measures to improve restructuring, insolvency and discharge of debt procedures. In addition, they make it easier for viable businesses in financial difficulties to access restructuring measures to avoid insolvency.
Also, the bills give the possibility of early warning and information to debtors, in order to highlight any risk of insolvency. They are also given the opportunity to maintain full or partial control of their assets and the day-to-day operation of their business during the restructuring.
The Companies Bill provides early warning tools, including alert mechanisms and advisory services, while public and private organizations, such as auditors, will warn legal entities when they encounter problems.
