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February 19, 2020
New Insolvency or Bankruptcy law for individuals has recently received quite a lot of attention from foreign expatriates living in UAE. The Cabinet of UAE has lately sanctioned a federal law to explicitly govern the cases of bankrupt individuals within the country. The law has been issued to safeguard the business interest of UAE residents, enhancing conditions of insolvent individuals and to ensure healthy competition among businesses.
Corporate Lawyers of Dubai have been vigorously asked about the nitty-gritty of the new law and how can individuals apply under the law to protect themselves from going bankrupt.
It is important for the individuals that the Law will protect the individuals for existing or anticipated financial crisis or disability to settle outstanding debts. The legislation will assist individuals in restricting their unpaid debts and will offer an opportunity to obtain loans on compromised or effective rates. The most significant feature of the laws favoring insolvent individuals are as follows:
a. decriminalization of financial obligations;
b. avoiding legal prosecution;
c. Offering jobs.
It has been further confirmed by the Cabinet of UAE that the law will be effective from January 2020, although a concrete legislation has not be issued to be referred to. Pertinently, financial experts will be appointed by the court in order to review the financial position of the insolvent individuals. The experts will be entitled to arrange payment plans for a maximum of three (3) year allowing them to settle their financial obligations in accordance with the plan.
It is of significant importance for readers to note that if the insolvent has been given a payment plan, they will not be allowed to seek further loans until the payment plan, unless approved by the relevant court authorities. The law has the further ability to complete legal procedures easily and to reduce court charges for individuals.
In a nutshell, the ideology behind issuance of this law is not only prepare payment plans to enhance their credit ratio, but to ensure swift growth in this dynamic market. The law, which supplements existing finance related laws, will add to expanded straightforwardness as far as common obligation reimbursement exchanges, and will at last fortify UAE position as a perfect center point for businesses, where the privileges of all parties are ensured.