In Jordan, can I restructure my small shop’s debts and stop suppliers from suing me?

In Jordan, if your shop is facing overdue invoices and bank installments, there are several legal avenues to manage debt while avoiding immediate enforcement:

1.     Negotiated Repayment / Out-of-Court Settlement: Jordanian commercial law allows debtors to negotiate directly with creditors to restructure payments. This can include installment plans, partial debt forgiveness, or temporary deferment. While not automatically binding, a formal written agreement reduces the risk of court action.

2.     Judicial Composition (Debt Restructuring under the Insolvency Law): The Jordanian Insolvency and Bankruptcy Law provides mechanisms for debtors to propose a restructuring plan to creditors. Once a court approves the plan, enforcement actions like asset seizure can be temporarily suspended. This is similar to a stay of execution and allows the business to continue operating while negotiating repayments.

3.     Bankruptcy Proceedings: If liabilities exceed assets, filing for bankruptcy can halt enforcement temporarily and allow for an orderly distribution among creditors. However, this carries reputational and legal consequences, including court supervision of operations.

4.     Practical Steps:

o   Immediately communicate in writing with your creditors, proposing a realistic repayment plan.

o   Document all communications and proposals.

o   Consult a Jordanian lawyer specializing in commercial and insolvency law to file for judicial composition or protective measures if negotiations fail.

Key References:

·       Jordanian Insolvency and Bankruptcy Law No. 21 of 2018.

·       Jordanian Civil Code provisions on obligations and contracts (Articles 155–157 on enforcement suspension by agreement).

By following these steps, you may pause enforcement actions while legally negotiating with creditors.