The UAE Cabinet has passed a federal law to decriminalise insolvency and protect those who are unable to pay their debts from going bankrupt.
The new law, to be implemented at the start of next year, will support those struggling with financial difficulties, help them reschedule their debts and give them the chance to receive new concessional loans.
#UAECabinet approves federal law concerning insolvency of natural persons#wamnewshttps://t.co/51cFHJQChR pic.twitter.com/mfTmziXsKb
— WAM News / English (@WAMNEWS_ENG) November 17, 2019
In protecting them from legal prosecution, it will also offer an opportunity to work and provide for their families.
A statement on the Emirates News Agency (WAM) website, said: “The law, which will enter into force in January 2020, will assist debtors in settling their financial obligations through one or more experts, to be appointed by the court. The experts will coordinate with the debtor and creditors to come up with a plan, lasting no longer than three-years, to settle the financial liabilities and fulfil all obligations stipulated in the plan.
“During this period, the debtor will be prevented from taking any loans until the court decides, upon the request of the expert, the debtor or any of the creditors, that the implementation of the plan has been accomplished.”
The law also contains special provisions that contribute to the swift completion of legal procedures and reduces the fees charged for rescheduling and restructuring the debts, with a view towards finding a fair compromise for both creditors and debtors.
The move, which works hand in hand with existing financial laws, is designed to strengthen the economy by promoting investment, improving competitiveness and encouraging entrepreneurship.
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