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InsolvencyIn line with the government’s insolvency framework, households in need of loan restructuring will approach their creditors through Insolvency advisors. The establishment of the rules for the operation of the insolvency advisors is a priority for the Ministry of Finance, which has drafted The Insolvency of Natural Persons (Personal Repayment Schemes and the Debt Relief Ordinance) Law of 2015. Mr. Sotiris Drakos is an approved insolvency counselor and our office offers insolvency and liquidation services. Insolvency advisors are a new professional group that will try to help households in need of loan restructuring to develop effective plans and to persuade banks not to consider households as unsustainable and not to sell mortgages. The draft insolvency framework states that the rules governing the operation of the advisors will be rigorous as they will have access to household financials. The role of the advisor The insolvency advisor’s attempt is to propose a plan which would provide for the maintenance of the main residence if this is considered feasible and would not leave the creditors worse off than in the case of the debtor’s bankruptcy. Companies and their rights Where the Court approves the examiner’s proposal, this proposal will be legally binding on all parties involved. The Court will approve the restructuring proposal prepared by the examiner if it considers that the proposal is “sound and fair”, taking into account the continuation of business activity, rescue of jobs, as well as the fact that creditors should not be in a less favorable position than if the company was in liquidation. |
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