Best Bankruptcy & Debt Lawyers in Hashemite Kingdom of Jordan

About Bankruptcy & Debt Law in Hashemite Kingdom of Jordan

Bankruptcy and debt law in the Hashemite Kingdom of Jordan is designed to provide a structured framework for both individuals and entities to manage insolvency while protecting the rights of creditors. The primary goal is to ensure a fair distribution of the debtor's assets, facilitate rehabilitation for individuals or businesses, and preserve economic stability. The legal system offers both restructuring and liquidation options, enabling debtors to seek protection from creditors or reorganize their financial affairs to emerge from bankruptcy.

Why You May Need a Lawyer

There are several scenarios where legal expertise may be essential in matters of bankruptcy and debt. If you are overwhelmed by debt and are considering declaring bankruptcy, a lawyer can help assess your financial situation to determine the best course of action. Legal assistance is also valuable for navigating complex laws, negotiating with creditors, restructuring debts, or defending against claims. Additionally, creditors may need a lawyer to ensure their interests are protected during a bankruptcy process.

Local Laws Overview

The Jordanian legal system concerning bankruptcy and debt is governed by the Bankruptcy Law No. 21 of 2018, which introduced significant reforms to modernize insolvency procedures. Key aspects include the introduction of a debtor-in-possession model that allows debtors to retain control of their assets during reorganization, the establishment of a specialized Bankruptcy Court, and provisions for preventive restructuring. The law also outlines the roles and responsibilities of trustees, judges, and creditors to enhance transparency and fairness in the proceedings.

Frequently Asked Questions

What is the difference between liquidation and reorganization in Jordan?

Liquidation involves selling off a debtor's assets to pay creditors, often leading to the closure of a business. Reorganization, on the other hand, allows a debtor to restructure their debts and continue operations while repaying creditors over time.

How does one file for bankruptcy in Jordan?

A debtor or creditor can file a bankruptcy petition at the specialized Bankruptcy Court. The debtor must provide comprehensive documentation of their financial status, including assets, liabilities, and cash flows.

Can individuals declare bankruptcy in Jordan?

Yes, both individuals and businesses may declare bankruptcy in Jordan under the Bankruptcy Law, provided they meet specific criteria of insolvency.

What protections does a debtor receive under bankruptcy law?

Once bankruptcy is declared, the debtor is protected from creditor lawsuits and collection efforts. This allows the debtor an opportunity to either liquidate assets or reorganize financial obligations under court supervision.

What are the creditor's rights in a bankruptcy case?

Creditors have the right to be informed about the bankruptcy proceedings, participate in meetings, and submit claims. They may also challenge the debtor's proposed reorganization plan if they believe it is unfair.

How long does the bankruptcy process take in Jordan?

The duration varies, depending on whether the case involves liquidation or reorganization, and the complexity of the debtor's financial affairs. Reorganizations generally take longer due to ongoing operations and creditor negotiations.

Are there any alternatives to bankruptcy for managing debt in Jordan?

Yes, debt counseling services, private negotiations with creditors for reduction or restructuring, and government-supported financial literacy programs are alternatives to filing for bankruptcy.

What role do trustees play in Jordan's bankruptcy process?

Trustees administer the bankruptcy estate, protect asset values, monitor debtor activities, and ensure compliance with the law. They also facilitate creditor meetings and oversee asset distribution.

Can bankruptcy filings be contested in Jordan?

Yes, creditors or other interested parties can contest bankruptcy filings if they believe the debtor does not meet the insolvency criteria or is acting in bad faith.

What happens to secured debt when bankruptcy is filed?

Secured creditors have claims to specific collateral and may recover their debtor's assets, even during bankruptcy proceedings, unless otherwise directed by the court.

Additional Resources

Those seeking more information or assistance can contact the Ministry of Industry, Trade and Supply for guidance regarding bankruptcy proceedings. Other resources include the Jordanian Bar Association for legal representation and the Central Bank of Jordan for financial guidance and support programs.

Next Steps

If you require legal assistance in bankruptcy and debt matters, it is advisable to consult with a specialized lawyer who can provide expert advice tailored to your situation. Begin by gathering detailed financial documentation and considering initial consultations to explore your options. Additionally, engaging with legal professionals early can maximize your chances of a favorable outcome in managing your debts.