“By welcoming the new ‘Insolvency Law’, the opportunity to do business in the UAE has become far more favorable towards individuals facing financial difficulties and from going bankrupt. It surely serves as a game-changer in the socio-economic sector” says Pratik Rawal, Head of Business Development at Creative Zone.
Dubai: The UAE’s new insolvency law for individuals will give a new lease of life to people struggling with debts and financial cases, according to potential beneficiaries and social workers.
The UAE Cabinet on Sunday announced a federal law to regulate cases of insolvency 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.
A three-year breather for restructuring their debts has come as a big boon to thousands who are caught in the debt trap and will be a game-changer in the UAE’s socio-economic sector, debtors and social workers who spoke to Gulf News on Monday said.
Being able to work legally for debt settlement without being criminalised and penalised will pave the way for a peaceful and painless journey towards debt freedom, they pointed out.
For people unable to pay off debts
The new law that will come into effect from January 2020 will help individuals facing financial difficulties and protect those who are unable to pay their debts from going bankrupt.
It will enable individuals who are facing existing or anticipated financial difficulties to reschedule their debt settlements within three years with the advice of experts appointed by the court. It will also provide them with the opportunity to be granted new concessional loans.
“Reading the news really made me so happy and I am relieved that the government took into careful consideration the protection needed for both debtors and creditors alike with the new insolvency law,” said Filipina expat Andrea*.
Gulf News had recently published her success stories of settling Dh2.7m worth credit card loans with just Dh26,000.
Since she still faces one more case, Andrea said she hoped to take the benefit of the new law.
“So much respect and high regard for the UAE government for the said implementation of the new law. Such great news to welcome the start of a new year for a debtor like me.”
She said it will help her greatly since it will give her an opportunity for a fresh start.
“I will definitely make use of this to jumpstart a better future for me. This will also be an excellent start for me to form a better financial freedom and realization on how to properly manage my finances in the very near future.”
A relieved Andrea said: “This law has lifted an extremely heavy burden from my shoulders and gives me peace of mind in dealing with debt settlement.”
S. Babu, an Indian businessman who had spent one-and-a-half-year in jail in some of the 24 financial cases he has faced, said the law will be a game-changer in the UAE’s socio-economic sector.
“This will be a win-win situation for all parties involved,” he pointed out.
“Debtors like me wouldn’t have had to face jail if the banks were willing to give a release letter and help restructure the loans. But the banks need support from the government to make those arrangements. This law is a go-ahead for that.”
“This law will help them get their money back, debtors can legally work or do business and return the payment and this will become a big game-changer for the economy of the country and welfare of the people.”
He said there are several people who can’t even leave their homes due to the constant pressure from their creditors and he had gone through a tough time fighting case by case all alone since he couldn’t even afford the legal expenses.
“It is a vicious cycle. Once you are in debt and face cases, everything gets blocked. Even though you can arrange money, you won’t be able to settle your debts as your documents become invalid and you cannot bounce back without working or doing business legally.”
Source: Gulf News