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The Insolvency Framework comprises of a package of six legislative texts which entered into force on the 7 May, 2015, the date of their publication in the Official Journal of the Republic (five laws and a set of regulations).
The first two laws are for natural persons whereas the third and fourth law is for companies. The fifth law and regulations regulate the profession of Insolvency Practitioners, which is pivotal for the successful application of the Insolvency Framework.
The six pieces of legislation have been put into force since the date of their publication in the Official Journal of the Republic, apart from Part I of the Insolvency of Natural Persons Law, regarding the Debt Relief Order. This part has come into force three months after the publication of the law, i.e. on the 7th August 2015.
- The creation of appropriate incentives for repayment of debt, thus contributing to a substantial decrease of non-performing loans.
- The protection, where feasible, of the primary residence under strict eligibility criteria.
- The provision of a second chance for a fresh start of a bankrupt person so that he/she can be reintegrated in the economy and society.
- The introduction of a new mechanism to afford full and speedy relief to debtors, with little unsecured debt with no assets and no income, who cannot file for bankruptcy according to the current laws (due to the low amount of their debt).
- The provision of incentives for the rescue and rehabilitation of companies to afford viable companies the opportunity to reduce indebtedness and preserve jobs, while maximizing the value as a going concern for the benefit of creditors.
- The modernization of laws regarding the liquidation of companies and bankruptcy for natural persons, so that the liquidation procedure becomes speedier and more efficient.
all Licensed Insolvency Practitioners.