The Central Bank of Cyprus has issued, on 3 April 2015, the Directive on Arrears Management of 2015 (as amended from time to time). The Directive, regulates the arrears management framework and establishes a Code of Conduct between Authorised Credit Institutions (ACIs), Credit Acquiring Companies, Loan Management Companies and obligors to whom the Directive applies.

The directive is available at the below link:

Directive on Arrears Management of 2015 to 2022

The main purpose of the Directive is to achieve fair and sustainable restructuring of credit facilities of those characterized as viable obligors (individuals and businesses) experiencing financial difficulties and who cannot meet their contractual obligations.

Under this Directive, credit institutions, credit Acquiring companies and Loan management companies are required to examine and evaluate each case individually and propose solutions, which correspond to the specific needs and economic circumstances of each obligor.

Code of Conduct on the Handling of Obligors in Financial Difficulties (“Code”)

The Code forms part of the Directive (Appendix 2 of Directive).

doValue Cyprus is obliged to apply the provisions of the Code to the following persons:

• Individuals granted credit facilities (including the credit facilities of their connected persons) up to one million euro (€1.000.000). The said scope of application includes guarantors of the obligor and third parties who provided securities to the Asset Acquiring Company for the obligor.
• Micro and small enterprises granted credit facilities with total balances of credit facilities (including credit facilities of their connected persons) up to one million euro (€1.000.000). Micro and small enterprises are defined as follows (European Commission Recommendation of 6 May 2013 concerning the definition of micro, small and medium-sized enterprises (2003/361/EC)):

Enterprise Category	Number of employees	Annual turnover of Balance sheet total
Micro	<10	< or = € 2 million
Small	<50	< or = € 10 million
Self-employed	Registered with VAT and Social Security

 The following persons do not fall within the scope of application of the Code:

• Persons for which an application for bankruptcy was filed by another creditor
• Persons for which a receiver or administrator was appointed by another creditor
• Persons for which a dissolution decree was issued
• The provisions of the Code do not apply to terminated facilities

The code is available at:

Code of Conduct on the handling of Obligors in Financial Difficulties

The Credit Institutions and the Loan management companies that have been set up and are operating in the Cyprus Republic and whom they are dealing with eligible obligors who face financial difficulties, they need to comply with the Code. The major targets of the Code are the following:

• Guides the communication during the presence of arrears
• Encourages cooperation between the Company & Obligors
• Full explanation of rights and obligations of obligors and adequate exchange of information is achieved
• Implementation of satisfactory and viable restructuring solutions
• Defines the obligations and responsibilities of the Loan Management Company during the Restructuring process

Obligations of Loan Management Companies in relation to eligible obligors that face financial difficulties and fall under the provisions of the Code

• The Loan Management Company is obliged to maintain communication with the obligor at the stage of early arrears and subsequent late arrears
• The Loan Management Company during the restructuring process is obliged to request the following for the purposes of assessing the repayment capabilities of the obligor

a) Individuals: “Personal Financial Statement” (PFS) duly completed and signed, signed declaration to doValue Cyprus on the completeness and accuracy of the data in the PFS, and any possible additional required information for the purposes of assessing the repayment ability.

(b) Legal Entity: financial statements submitted for audit or review or management accounts (if financial statements submitted for audit or review are unavailable) and any possible additional required information for the purposes of assessing the repayment ability.

In case of obligors (Individuals and Legal Entities) whose repayment ability of credit facilities under restructuring is based also on their guarantors, the Loan Management Company shall require from these guarantors to submit corresponding information as that required from the obligors in order to adequately assess their repayment ability.

What is the time limit for the submission of financial and other information?

(a) Individual: Fourteen (14) days from the maturity date for action by the obligor in accordance with the communication letter for mid arrears or serious arrears or due to the obligor classification as “non-cooperative”, whichever applies.

(b) Legal Entity: Two (2) months in case financial statements submitted for audit or review will be submitted or one (1) month in case management accounts will be submitted, from the maturity date for action by the obligor in accordance with the communication letter for mid arrears or serious arrears or due to the obligor classification as “non-cooperative”, whichever applies.

How is the collateral assessment performed?

doValue Cyprus shall perform a thorough assessment of the collateral as a secondary source of repayment. It shall conduct an independent professional valuation to determine the open market value and forced sale value of the property, in cases where:

(a) the existing collateral will be sold to reduce the obligor's credit facilities;

(b) an unencumbered property will be considered as additional collateral;

(c) an unencumbered property will be assigned so to convert an unsecured credit facility into a secured credit facility.
 

How does doValue Cyprus communicate its decision to the obligor?

doValue Cyprus communicates to the obligor, and where applicable to the guarantor, its final decision by handing him a “letter of offer”/“letter of negative decision” or by post where a meeting is not feasible. 

What process shall the obligor follow in case he decides to reject doValue Cyprus’s restructuring solution?

In case an obligor decides to reject the restructuring solution he needs to notify doValue Cyprus in writing within twenty-one (21) days from the date of receipt of the “letter of offer”. Thereafter, doValue Cyprus shall within seven (7) days respond to the obligor in writing:

(a) expressing its willingness to converge, again, in order to assess other options, if possible, or

(b) explaining that this is not possible and setting out the implications for the obligor if he rejects the proposal.
 

Appeals Committee ("AC")

In compliance with the Directive, doValue Cyprus has established an AC composed by members who are independent from the restructuring services provided to its Clients,  in order to handle appeals submitted by eligible obligors with respect to restructurings, in an effective, efficient, timely and impartial manner.

An obligor has the right to submit in writing an appeal to the AC of doValue Cyprus or to the AC of the Credit Acquiring Company within:

(a) one (1) month from the date of receipt of the letter from doValue Cyprus explaining that it is not possible to assess other options beyond the “letter of offer” that has been already communicated to the obligor, or

(b) one (1) month from the date of receipt of the “letter of negative decision” from doValue Cyprus, or

(c) five (5) working days from the date doValue Cyprus submits its restructuring proposal, as a result of the mediation process.

The AC shall handle the appeal and proceed to:

(a) examine whether doValue Cyprus has adhered to the provisions of the Code of Conduct,

(b) in case of rejection of the proposed restructuring solution by the obligor,  investigates whether the solution proposed was appropriate and compatible for the obligor's case, otherwise proposes for a re-examination of the case to form another proposed restructuring solution or,

(c) in case of refusal by doValue Cyprus for restructuring due to the fact that no sustainable restructuring solution was found, contacts a reassessment of the obligor ensuring that no other restructuring solution exists.

According to the Directive, obligors will receive an official acknowledgement of receiving the filing of the appeal within twenty-one (21) days from the date of receipt of the appeal and they will receive the official decision of the AC within two (2) months from the date of receipt of obligor’s appeal.

The AC shall have the right to invite the obligor who filed the appeal for a meeting as well as the obligation to have a meeting with the obligor should he or she requests such a meeting.

Communication with AC

Written submission of an appeal may be performed by email or by post. Specifically:

- By email

Send an Appeal Submission Form to the email address appeals.committee@dovalue.cy

To print the Appeal Submission Form click here.

- By post

Send an Appeal Submission Form to the AC of doValue Cyprus:

P.O. Box 12835, 2253 Latsia, Nicosia, Cyprus

To print the Appeal Submission Form click here.

It is noted that for any information or clarifications on the progress of their appeal, the obligors may contact doValue Cyprus at phone number 22696300 or via email to appeals.committee@dovalue.cy

Important Notice:

In submitting your appeal, you confirm that you have read the Privacy Policy of doValue Cyprus, which is found on its website and that you are aware of it and accept its provisions. You understand that, for the assessment of your appeal, doValue Cyprus shall need to process your personal data, as defined in applicable legislation including the GDPR. You further acknowledge and agree that doValue Cyprus shall process your personal data in line with the applicable legal and regulatory framework and to protect its legitimate interests.

In the process of assessing your appeal, doValue Cyprus may disclose the appeal and any other information regarding your credit facility (including your personal data) to the Credit Acquiring Company.

Mediation Procedure via the Financial Ombudsman

The obligor has the right if he / she wishes to submit a written request to the Commissioner of Financial Disputes Resolution (the “Commissioner”) for the appointment of the Mediator in relation to the restructuring of credit facilities.

This applies where the total contractual obligation of the obligor does not exceed € 350.000 (Three hundred and fifty thousand euro) and is secured by a mortgage or collateral assignment over a property used as a main residence (resident owner for a period of at least six months per year) the estimated value of which does not exceed three hundred and fifty thousand (€350,000) euros or business premises, the estimated value of which does not exceed seven hundred and fifty thousand (€750,000) euros respectively .  In addition, the above definition also includes the leasing of a real estate property used as a main residence or as a business premises. 

The application for appointment of the Mediator can be submitted as provided in the Financial Ombudsman Law L.84(I)/2010:

• Within 14 days from the day the obligor submitted the “Personal Financial Statement” (PFS) to doValue Cyprus as provided in the Directive or
• In case the obligor did not submit an application to appoint a mediator within the said 14 days, within 30 working days from the date that doValue Cyprus, submitted to the obligor the “Letter of Offer” / “Letter of negative decision” for the restructuring of credit facilities.
• If the obligor  does not receive a Letter of Offer or does not receive a  Letter of negative decision within six (6) months from the date of submission of the PFS, the debtor may submit the application within thirty (30) working days from the expiry of the six-month period

The duration of the mediation process shall not exceed 1 month; however this period may be extended at the Ombudsman’s discretion for a further month.

The cost for the use of the Ombudsman’s services does not exceed five hundred euro (€500) and is allocated 80% to doValue Cyprus and 20% to the obligor.  If the obligor decides to discontinue the mediation procedure, then the obligor is liable to pay the full cost of the mediation.

Compliance

doValue Cyprus Limited (hereinafter the "doValue"), is a limited liability company incorporated under the laws of the Republic of Cyprus under registration number HE 376434 and is active in the field of the management of non-performing loans and administration and commercial management of real estate assets.

Privacy Policy

doValue Cyprus complies with the laws and regulations for the personal data protection.

On the 25th of May 2018, the new European data privacy law, known as the General Data Protection Regulation (“GDPR”), has come into force. GDPR defines a specific framework and set of rules for the protection of individuals within the European Economic Area (EEA) with regard to the processing of their personal data.

More information on personal data protection is available here.