Disy submits bill to ease burden on ‘trapped’ loan guarantors

Opposition party Disy have presented a proposed law aimed at relieving thousands of guarantors who remain financially liable for loans without having received any benefit.

Speaking at a press conference on Friday, Disy president Annita Demetriou said it was “not possible for thousands of our fellow citizens to remain trapped for so many years, without having received a single euro”.

The bill was submitted to parliament on Thursday, presented by MP Averof Neophytou and co-signed by MPs from across the aisle.

Demetriou used her introductory remarks to criticise the government’s handling of rising costs, describing its methodology as “deeply flawed”.

She said Disy had worked constructively to improve tax reform, with a focus on supporting the middle class, families, and Cypriot businesses, while stressing that further support was still needed for low-income pensioners as well as those with disabilities.

She reiterated the need for a favourable tax system, rejecting calls for new taxes which, she said, “always end up burdening the people”.

Demetriou called on banks to reduce the gap between lending and deposit interest rates, adding that both the government and the central bank must act in that direction.

Presenting the substance of the proposal, Neophytou said conditions in the banking sector had changed, with banks now showing strong profitability, while most non-performing loans (NPLs) were no longer held within the system.

Under the proposed law, in cases of auction or repossession of mortgaged property, a guarantor’s liability would be limited to the original loan amount minus any sum recovered through the sale.

Where such limitation is disputed, banks or credit acquisition companies would be required to suspend the sale and await a court ruling.

The provisions would also apply to cases already pending before the courts.

Neophytou also acknowledged the difficulties faced by first-time borrowers and urged the government to introduce a targeted support scheme based on socio-economic criteria.

He said protection should extend to those who have already repaid at least 50 per cent of their original loan.

Disy claim the bill seeks to restore balance and fairness for guarantors who have carried heafty financial obligations without legal protection.