NEW FINANCIAL LAW IN UAE CAN AID INDIVIDUALS FACING FINANCIAL DIFFICULTIES
Financial crisis spurred host of efforts in UAE Cabinet to re-engineer their bankruptcy law regimes and approved a federal law as a legal mechanism to regulate cases of insolvency and/or aimed to resolve debt relief cases for individuals or natural person in UAE.
The newly pioneered Federal Decree-Law aims to strengthen UAE’s financial and economic stability by building a legislative and legal system primarily focused to increase transparency in civil debts and bolster financial security. This law guarantees the protection of debtor’s propriety and helps to devise an opportunity for them to cope with their finances and lessens their financial distress. More to say, this legal framework helps individuals repay their debts and guarantee that financial institutions receive their financial dues through transparent mechanism.
WHAT DOES THE INSOLVENCY LAW OFFERS?
The following are the main facets of the law:
- Aids individuals who faces current or anticipated financial difficulties that makes them unable to fulfil their financial obligations and pay their debts.
- Enables insolvent individuals to reschedule their debts and be granted new concessional loans.
- Decriminalize financial obligations on insolvent individuals and protect debtors from legal prosecution.
This law provides two main avenue and procedures to insolvent individuals:
- EXPERT ASSISTANCE: Insolvent person are given leeway to seek court assistance to settle debts. One or more experts will be appointed by the court, and these experts will coordinate with the debtor and creditor assisting them to advocate a financial settlement plan beneficial to both parties.
However, the court can terminate or reject a request made by the debtor under the following circumstances:
- Insolvent individual tried to conceal any part of his assets;
- Insolvent individual submitted false / fabricated statements concerning his assets, rights and liabilities; or
- Insolvent individual failed to settle a due debt for a period of more than fifty business consecutive days.
- LIQUIDATION PROCEEDING: In the event the insolvent individual is unable to pay his debts for an extended period of time, he then can resort to these process which is done by a trustee appointed by the court. However, this proceeding will impose restrictions on debtors use of his/her money and assets and will apply further restrictions in regard to entering into new obligations or obtaining new loans during the process.
Notwithstanding the above, the insolvent individual shall restore all his rights at any point in time in the event that he was able to conclude a settlement with his creditors and complies to its execution, or if the insolvent individual was able to establish that he has been discharge from debts to all his creditors.
ARE YOU LOOKING FOR LEGAL ASSISTANCE?
The Office of Al Reyami Advocates & Muhyealdeen can provide you legal advice and assistance through its dedicated team of experts in the light of the new Insolvency Law.