Insolvency Law in the UAE

Insolvency Law in the UAE

Debt collection is an important part of the business because it affects the cash flow. Sometimes, the debtor is reminded to clear their debt at the earliest, because they have already missed the deadline for payment.

There are some dodgy debtors and some are insolvent. The latter term is defined as a person who is bankrupt and cannot pay their debt. However, in such of situation, the UAE laws permit debt recovery Dubai agents to think of another solution that may satisfy their client or take the help of the court

Some debtors understand that settling someone’s debt is important, and they must work on it. However, the UAE Insolvency Law asks the debtor to appear in court, where he would request the court to avoid litigation and settle an amicable financial obligation with the creditor.

If the court confirms the debtor’s bankruptcy, then their case is approved for an amicable agreement with the creditor. Nevertheless, nothing can be done without providing supporting documents for the financial settlement request. Usually, the court decision comes within a week if all the required documents are provided by the debtor.

Moreover, the court may refuse the request of the debtor for financial settlement if they provide false information, such as missing supporting documents or if the document is incriminating. Sometimes, a dodgy debtor may hide their actual financial situation to show themselves insolvent, but if debt recovery dubai agents find out about it, the debtor could be in trouble.

The debtor is not left alone to manage the financial obligation. The court believes in collaboration between an appointed expert and the debtor so that a reasonable payment plan can be chalked out.  

Once the financial plan is finalised, it is shared with the creditor and the court within months. For an amicable settlement, another time is arranged between the debtor and the creditor. However, clearing all the payments is good for the debtor, but they cannot have any kind of loan or financial assistance for at least 3 years in the UAE. Therefore, if you are a debtor, make sure that you pay the amount timely.

Dear Readers, learn more about Debt Collection or Debt Recovery in Dubai




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