Bankruptcy in Cyprus is regulated by the Bankruptcy Law, Cap. 5 and relevant regulations. Bankruptcy refers to physical persons who commit an act of bankruptcy as provided in Cap. 5. Bankruptcy proceedings may be initiated by a creditor or voluntarily.
Initial proceedings in Cypriot bankruptcy
As mentioned above, bankruptcy procedures in Cyprus can be initiated by a creditor. A creditor may ask a Cypriot court to initiate bankruptcy proceedings under one of the following circumstances:
the debtor disposed his assets in a fraudulent way in an attempt to delay or avoid paying the debt,
or failure of complying with the bankruptcy notice.
Compulsory bankruptcy procedure in Cyprus
Once the evidence has been evaluated, the court can issue a bankruptcy order. Through the receiving order a trustee, also called an Official Receiver, will be appointed. The Official Receiver will assess and then distribute the assets among creditors. The receiving order will be published in two newspapers and in the Official Gazette. The debtor will give the trustee details about its debts and creditors. These details must be provided within seven days to the creditor, or within three days if the debtor filed the petition himself. The Official Receiver establishes a general meeting of the creditors within a maximum of 14 days and appoints a trustee to coordinate the bankruptcy procedure but will also allow the debtor to reach an agreement with his creditor. Our law firm can offer you details about bankruptcy proceedings and legal support.