Shutterstock/Marianna Ianovskaby Kudakwashe Muzoriwa
The UAE Cabinet has approved a federal law to regulate cases of insolvency of natural persons, that aims to enhance the competitiveness of the country by ensuring the ease of doing business, creating favourable conditions for individuals facing financial difficulties and protecting those who are unable to pay their debts from going bankrupt, according to local newswire, WAM.
The new law, which will enter into force in January 2020, is part of the government's efforts to ensure convenience for citizens and residents and respond to their needs. It will assist debtors in settling their financial obligations through one or more experts, to be appointed by the court.
Additionally, the law prevents debtors from taking any loans during the period of settling their financial liabilities 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 an aim to find a fair compromise for both creditors and debtors.’
Similarly, while complementing the existing financial laws, the new law will contribute to increased transparency, in terms of civil debt repayment transactions and will ultimately strengthen the UAE's position as an investment hub where the rights of all parties are guaranteed.