The Council of Ministers adopted a federal law to regulate insolvency of the natural person, which enhances the competitiveness of the State in the field of ease of doing business, to facilitate individuals facing financial difficulties, and to protect others who are unable to pay their debts from bankruptcy.
The new law is part of the government's efforts to make it easier for citizens and residents to find out about their needs. The law deals with individuals who face current or anticipated financial difficulties that make them unable to settle all their debts, or what is known as the insolvency of the natural person, to help these individuals to reorganize their debts. They have the opportunity to borrow again on concessional terms. The law applies to a natural person who does not engage in economic activity and is not considered a merchant class. The law protects the debtor from any legal prosecution, denies criminal status for the financial obligations of the insolvent person, and gives them an opportunity to Work and productivity and support their families.
The law will enter into force from January 2020, and will assist the debtor in settling its financial obligations, through one or more experts appointed by the court to settle obligations, which is preparing a plan in coordination between the debtor and creditors for a period not exceeding three years to settle financial obligations and fulfill all obligations The court shall, at the request of the expert, the debtor or any of the creditors, issue a decision to complete the execution of the plan.
The law also includes special provisions that contribute to the speed of deciding on the procedures, and reduce the burdens required to reorganize and restructure the debts, in order to develop a balanced solution in the interest of creditors and debtors at the same time.
The law contributes to enhancing the long-term creditworthiness of the state and prospects for its future growth, in addition to enhancing the competitiveness of the state and the strength of its economy, in order to achieve a stable economy that provides individuals with a favorable and encouraging environment for doing business.
It is worth mentioning that the law is a complement to the system of integrated financial laws in the State, which supports increased transparency on transactions to repay civil debts, and thus enhance the financial stability in the country and support its position as an ideal investment environment that guarantees the protection of the rights of all parties.