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The Bankruptcy and Debt law in Dubai, part of the United Arab Emirates, is a fairly new piece of legislation, having been implemented in 2016. This law constitutes a modern framework that assists individuals and companies in financial distress, allowing them to reorganize their affairs or liquidate their assets in an orderly fashion. The law applies to companies established under the Commercial Companies Law, companies not regulated by this law, and civil companies. It does not apply to government-owned companies unless these companies declare their intent to be subject to the provisions of the law.
While you may be able to navigate bankruptcy and debt procedures on your own, it's often recommended to consult with a lawyer due to the complexity of the process and the law itself. Situations may arise where you're facing legal actions by creditors, negotiating settlements, or preparing to file for bankruptcy. You might also require assistance in understanding how to restructure your debts effectively. Lawyers can guide you, offering legal strategies tailored to your situation and assisting you in paperwork and legal proceedings, so you are compliant with all laws and regulations.
The central aspect of the 2016 Bankruptcy Law is that it provides debtors with the opportunity to reschedule their debts, allowing businesses to continue operating while repaying their debts over a period of three years. It also provides a mechanism for dealing with insolvency situations, with a significant aim of it being to assist struggling businesses. The law also includes penal provisions criminalizing actions like hiding assets or funds during bankruptcy procedures, escaping from the country with the intention to evade bankruptcy proceedings, or carrying out fraudulent acts affecting creditors’ rights.
As of 2020, a new law was introduced allowing individuals, as well as companies, to file for bankruptcy, particularly offering relief to those with personal loans they're unable to repay.
The debtor themselves, the creditor, or the public prosecutor can initiate the bankruptcy proceedings by filing a request before the concerned court.
Declaring bankruptcy does not mean you are freed from all debts. Some debts, such as court fines or penalties, may still need to be paid. Additionally, the debtor may face certain restrictions, such as being prohibited from practicing a profession or trade unless they regain their financial standing.
Yes, you can start a new business after bankruptcy, but the debtor may face certain restrictions until they have completed their bankruptcy proceedings and regained their financial standing.
By law, your employees' rights are protected and must be part of the restructuring plan or liquidation process. The court may appoint a trustee to oversee this.
You may find it useful to connect with organizations such as the Dubai Chamber of Commerce and Industry, or UAE's Ministry of Finance for further information and resources. Many legal firms also offer free initial consultations, which can provide tailored advice to your situation.
If you are considering filing for bankruptcy or need assistance with debt management in Dubai, UAE, it's crucial to consult with a legal expert specialized in bankruptcy and financial law. They can assess your financial situation, explain your rights and options, and guide you through the relevant legal process. Make sure you gather all relevant documents related to your financial standing to facilitate your discussion with your lawyer.
