According to the Ministry of Finance, persons who are already in custody pending cases related to checks, can apply to the court to settle them under the umbrella of the insolvency law since the implementation of the law early next year. Insolvency proceedings and a plan within a comprehensive settlement to be agreed upon.

This came during a briefing to the ministry, yesterday, on the Federal Law No. 19 of 2019 on insolvency of individuals.

good well

In detail, the Undersecretary of the Ministry of Finance, Younis El Khoury, said that "the law deals with persons of good faith, and the court determines the eligibility of the insolvent for settlement," noting that the insolvency law will not drop the criminal status of the checks, but it will stop any lawsuits or criminal proceedings, including imprisonment. Pinching until the settlement is over.

Al-Khouri pointed out that the reports of the Union Credit Information Company help the expert appointed by the court to assess the financial situation of the insolvent debtor and its eligibility to settle, pointing out that the indicators show a low rate of financial default among individuals due to credit inquiry. He pointed out that individuals borrowing from banks who have defaulted, can apply to the court to benefit from the insolvency law, as long as the conditions and documents of the application are available, pointing out that the insolvency law also allows the creditor to apply for insolvency of the debtor and the liquidation of his funds, if he is demanding an amount of 200 thousand dirhams or more, But it is required to prove the insolvency of a city.

Al-Khouri added: «The insolvency law differs from the bankruptcy law, which was issued by decree-law No. (9) of 2016, especially in terms of the definition of the debtor, as the insolvency law of the natural person, applies to the natural person who does not engage in economic activity and is not a trader . But at the same time, the basic purpose of both laws is united, as both have been found to protect the common interests of both the creditor and the debtor in a fair and balanced manner, dividing the risks between them in such a way as to remove the debtor from the circle of financial difficulties and enable him to pay the debts accumulated.

He continued: «The draft law provides two means to address the occurrence of insolvency of individuals, the first: the possibility of settling financial obligations, and the second: the resort to insolvency and liquidation of funds».

Financial difficulties

He explained that «if the debtor is facing current or expected financial difficulties, which makes him unable to settle all his debts, he can submit an application to the court, so as to have the opportunity to settle his financial obligations, according to easy and easy procedures, provide him with the necessary assistance, where the court hires an expert Or more to help him during those actions. A plan to reorganize and settle financial obligations is being prepared. Such a settlement plan shall be voted on by the creditors in accordance with a certain mechanism, and the plan shall be implemented by the debtor directly, with the assistance and supervision of the expert, and by monitoring the court.

Al-Khouri continued: «The law also provides another way in the case of insolvency of the debtor and reach the stage of the need to liquidate his money to pay off debts, if he had stopped paying any of his debts on maturity for more than 50 consecutive working days, as a result of his default With this debt. Creditors may also request liquidation of their funds under special conditions. In the event of liquidation of funds, a trustee shall be appointed to control and facilitate the liquidation of the debtor's funds in accordance with the terms and conditions contained in the draft law.

Insolvency of the debtor

For his part, the adviser to the Minister of Finance, Dr. Hossam Talhouni, said that «the ruling on the declaration of insolvency of the debtor and the liquidation of his funds a number of measures, most notably preventing the debtor from obtaining a loan or new financing for a period of (3) years from the date of the judgment to declare his insolvency, in addition to preventing the debtor To enter into obligations, with or without compensation, except as may be necessary to meet his essential needs or his dependents for a period of (3) years, commencing from the date of issuance of the insolvency of the debtor and the liquidation of his property, unless the court authorizes him to do so, by order of a request by the debtor, to In addition to recording the names of debtors who have been sentenced to judicial decisions on the month of insolvency and describe Of their money in the record ».

Talhouni added that after the insolvent debtor is able to settle its obligations, he will be rehabilitated, which means

The rights deprived by the debtor in accordance with the provisions of this law shall be realized by fulfilling any of the following:

• Three years have elapsed from the date of expiry of the insolvency and liquidation of the debtor proceedings.

• Expiry of two years from the date of expiry of the procedures for declaring the insolvency of the debtor and the liquidation of its funds, if it has paid 50% of its debts.

• Expiry of one year from the date of expiry of the procedures for declaring the insolvency of the debtor and liquidating its funds, if it has paid 75% of the debts.

• A notorious debtor shall be deemed to be insolvency, even if the time provided for in Article (55) of this Law has not been canceled, if he fulfills all his debts accepted by the court during insolvency and liquidation proceedings.

• The insolvent debtor may be rehabilitated, even if the period provided for in Article 55 of this Law does not expire, if he reaches a settlement with all his creditors and commits to execute it, or if he proves that the creditors have cleared him of all debts which he still owes. Court decision declaring insolvency and liquidation.

• The debtor may be rehabilitated after his death, upon the request of the heirs. The dates provided for in Article 55 of this Law shall be calculated from the date of death.

House of insolvent debtor

The legal advisor to the Minister of Finance, Dr. Hossam Talhouni, said that the right to sell the insolvent debtor's house, if it is luxurious, and the proceeds of the sale is sufficient to pay part of the debt, provided that an appropriate amount is allocated to him to provide a suitable alternative housing for him and his family, pointing out that the final decision in the matter The sale of the dwelling is subject to court discretion.

He added that insolvent individuals can apply to the court to take advantage of the law, even if they are unemployed, provided that there are properties that can be sold in the liquidation procedures, pointing out that the court is also entitled to withhold the salary of the insolvent, after saving enough living expenses necessary for him and his family.

An insolvent debtor may not be imprisoned, but his failure to settle the plan stigmatizes him and remains prohibited from borrowing until his creditors are repaid.