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posted 8 years ago
The economic downturn in recent years has resulted in the increase of natural persons declaring their businesses insolvent. Legislation that governs insolvency is based on Chapter 5 of the Insolvency Law according to the recent amendments of the law.
The purpose of bankruptcy is to proclaim that an individual is unable to repay their outstanding debts and through the bankruptcy process any assets will be allocated as compensation to any creditors that are owed money. For a natural person to declare their voluntary admission of bankruptcy an application on certain conditions that satisfies the law has to be made to the relevant jurisdiction of the
However, another method of declaring a natural person insolvent and perhaps the most common is an application by an unhappy creditor to the Court to safeguard any outstanding liabilities.
The Court for the purposes of regulating and disposing of any assets will issue what is known as a receipt of
The most asked question is to the process involved in being re-instated to a status of
According to existing insolvency
The debtor may not influence his insolvency position that could affect any of the assets involved and could result in the Court denying their restoration and suspending the validity of the decree.
In important
Before the amendment, the bankrupt individual was automatically restored within a time period of 4 years.
The amended law secures creditors since it does not release the debtor from any liabilities until there has been a settlement of all liabilities that includes preferential debts, public debts, judicial fees etc.
The legislation was amended in Cyprus owing to the recession and the global crisis. The declaration of bankruptcy had become a lever to avoid debts and had consequently caused huge economic losses to creditors. Present legislation protects and safeguards financial losses incurred from the bankruptcy act of a natural person.
The content of this article intends to provide a general guide to the subject matter. Specialist advice should be sought
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