Cyprus: Akel Tables Bills In Order To Protect Loan Guarantors
Akel has tabled 3 bills aiming to encourage the protection net around loan guarantors. However, a 4th bill stating to extend the time period until a bank moves in on a debtor’s property has been completely declined by the finance ministry and banks as well.
Moreover, Akel disclose the bills at the recent House finance committee. The first changes the law on the insolvency of natural persons, so that protection from legal action to loan guarantors, of whom guaranteed a debt governed by a personal repayment scheme, is lengthened to up to 6 years from the entry into force of the insolvency law.
Following this, the insolvency law came into force on the 7th of May 2015. Of now, as the law stands, the protection afforded to loan guarantors covers only loan guarantee contracts entered into prior to that date.
The 2nd legislative proposal amends the bankruptcy law in order to ensure the protection granted to loan guarantors. This is in reference to the monthly instalments paid toward the verifiable debt of a bankrupt debtor, which will be extended to up to 6 years from the entry into force of the insolvency law.