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Bankruptcy law in Abu Dhabi, part of the United Arab Emirates (UAE), is governed by the Federal Law No. 9 of 2016 on Bankruptcy. This law applies to companies established under the UAE Companies Law, free zone companies excluding those governed by their specific laws, as well as trade licensed individuals or businesses. The bankruptcy law provides mechanisms such as financial restructuring, composition, and bankruptcy by court judgment.
Bankruptcy proceedings can be complex. Whether you are considering filing for bankruptcy, or already amidst the process, you may require a lawyer to ensure you navigate the process lawfully and efficiently. Legal counsel may help in assessing financial situation, choosing the best applicable process, structuring payment plan in insolvency, and defending against involuntary bankruptcy filed by creditors.
The UAE bankruptcy law primarily focuses on rescue and restructuring for businesses in financial distress, as opposed to termination. If a debtor fails to meet their financial obligations, they are directed to apply for insolvency to the court. If the business has not become insolvent and there are indicators for financial distress, preventive composition procedure can be initiated. The law also decriminalizes bounced cheques issued in the course of the bankruptcy process.
Failure to apply for insolvency in a timely manner can lead to imprisonment and fines as per the UAE law. It's important to seek help at the first signs of financial trouble to avoid penalties.
Not necessarily. The bankruptcy law in UAE is designed to help businesses overcome financial difficulties and continue operations if possible through restructuring processes.
Bankruptcy can negatively impact your credit score, making it harder to obtain loans or credit in the future. However, the specifics should be discussed with a knowledgeable legal advisor.
Yes, creditors can file for an involuntary bankruptcy case against you if they meet certain criteria established by law.
The bankruptcy trustee, appointed by the court, plays a major role in insolvency proceedings. They are responsible for reviewing your assets and debts, handling related transactions, and representing the interests of the creditors.
You can refer to the UAE Ministry of Finance or UAE Ministry of Justice for official details on bankruptcy laws and processes. The Insolvency Law for Individuals is accessible through the official UAE government portal. Local legal advisory services also provide specialized guidance.
If faced with financial distress or bankruptcy, it is recommended to seek legal counsel immediately. A qualified lawyer can help you understand your options and legal obligations, guide you through the process and represent you in court if required. It is crucial to act proactively, assess your financial situation and begin the legal process at the earliest to mitigate potential losses.
