Good decision

It is heartening to note that the UAE Cabinet has approved a federal law to regulate cases of insolvency of natural persons, aimed at enhancing the competitiveness of the UAE 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.

The authorities deserve praise for enacting the new law as part of the government’s efforts to ensure convenience for citizens and residents, and respond to their needs.

The law is timely and welcome decision because it will support individuals who are facing existing or anticipated financial difficulties, rendering them unable to settle their debts. The law will help them reschedule their debts and provide them with the opportunity to be granted new concessional loans.

In addition, the new law will protect the debtors from legal prosecution, decriminalise the financial obligations of insolvent persons, and offer them an opportunity to work, be productive and provide for their families.

Debtors deserve help in settling their financial obligations and it is good that the law, which will enter into force in January 2020, will assist them 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.

Importantly, 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.

I am sure that the law, which complements existing financial laws, will contribute to increased transparency, in terms of civil debt repayment transactions, and will ultimately strengthen the UAE’s position as an ideal hub for investment, where the rights of all parties are guaranteed.

Ravi Chandran
By email