The proposal made to a number of account holders by Alpha Bank ( including a number of clients of Christofi Law) ) to consider the possibility of restructuring and writing off part of the loans made to those clients raises a number of issues for those unsure what to do about the proposal. Christofi Law feel that the following may have general application.
- The proposal seems to bear out the assumption that Alpha Bank may have failed to deal with loan procedures sufficiently to the point that such loans are in danger of being declared invalid.
- This is encouraging to all who have borrowed from banks in Cyprus, particularly in CHF, and not just Alpha Bank. This is because other banks are likely to be reviewing their legal position in just the same way.
- This is encouraging to those who are proposing to issue proceedings against the banks . It means that they can issue proceedings knowing that the banks have it in mind to settle some or all of the claims;
- It is important that those who have not considered issuing proceedings now do so. The limited time to do so for most (December 2013) means that there is a limited window within which to do that. After December many people will be hostage to any proposal which the bank puts forward rather than being able to shape their own proposal.
- A simple cost benefit analyses suggests that it is in most peoples interests to take the plunge and spend on issuing proceedings rather than doing nothing – the potential benefits of doing something far outweigh those of doing nothing.
- People need to avoid the temptation of thinking that they can sit back and do nothing until the whole issue resolves itself or agreements have been reached with other people they know.
- “Groups” have no influence. It is not necessary to be part of any “group” as these proposals have been put forward to individuals rather than to any group. Christofi Law clients have received proposals regardless of whether the bank was aware Christofi Law are acting or not.
- Finally, It is essential that anyone instructing a representative avoids instructing someone based on a “percentage saved” basis, or a mixture of fee and percentage saved. News reaching Christofi Law suggests settlements may possibly be in the region of a repayment of 75% of the sums paid to the bank and a restructure of the original loan. People agreeing to pay representative on a “percentage saved” basis could therefore be looking to pay very substantial amounts to representatives – big enough for individuals to end up owing more to those representatives than to the banks. It begs also the question of whether representatives might have been aware that there would be a proposal put forward at some point.
Christofi Law would like to hear from anyone who has negotiated a settlement with Alpha following their letter. All information to firstname.lastname@example.org