Personal Insolvency
Declare Personal Insolvency in Dubai, Ajman, Sharjah, Abu Dhabi, UAE
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Personal insolvency in the UAE means a person (not a business or trader) cannot pay their debts because of money problems now or in the future. This is covered by Federal Decree-Law No. 19 of 2019 on Insolvency. The law gives two options: a court-approved payment plan or, if payment is not possible, insolvency and selling your assets. All steps are handled by the UAE court.
At HHS Lawyers, our insolvency lawyers can help you with:
- Checking your financial situation and advising if you should apply for a payment plan or full insolvency.
- Preparing and organising all documents needed to file your case with the right UAE court.
- Guiding you through every court step, including meetings with the expert and your creditors.
- Helping you follow all rules during your approved payment plan.
- Advising you on rehabilitation and how to get your legal and financial status back after insolvency.
What Is Personal Insolvency Under UAE Law?
Personal insolvency in the UAE means a person cannot pay their debts — either because they already cannot pay now, or they know they will not be able to pay soon. The law calls this person a “debtor.”
The main law for this is Federal Decree-Law No. 19 of 2019 on Insolvency. This law is only for individuals, not for traders or companies. Traders and businesses follow a different law: Federal Decree-Law No. 9 of 2016 on Bankruptcy.
If a person has both personal debts and business debts, then:
- Personal debts follow the Insolvency Law
- Business debts follow the Bankruptcy Law
The Insolvency Law gives two main options:
- Settlement of Financial Obligations — A court-supervised payment plan agreed with creditors
- Insolvency and Liquidation — If a payment plan is not possible, the court sells the debtor’s assets and pays creditors in order of priority
Why a Personal Insolvency Lawyer Is Needed in Dubai, UAE
The primary purpose of the UAE Insolvency Law is to help people in the UAE who are under financial stress. The importance of Personal Insolvency lawyer in UAE is important because:
Understanding the Law
A personal insolvency lawyer will help you understand the laws surrounding insolvency in the UAE, which can be quite complicated and confusing. They will explain the process in a way that’s easy to understand, so you know what’s happening every step of the way.
Preparing Court Documents
The process of insolvency involves many documents, both financial and legal, which a personal insolvency lawyer will help prepare correctly, making sure that nothing is left out and everything is in the right format.
Protecting Your Rights
The lawyer will protect your legal rights throughout the process. They will also protect you from unfair actions by banks or creditors and advise you on what to do and what not to do.
Representing You in Court
The lawyer represents you in court and explains your financial condition to the judge on your behalf. This also gives you a higher chance of getting your application approved.
Negotiating With Banks and Creditors
The lawyer takes care of dealing with banks and creditors, thus relieving your stress. They also try to obtain favorable terms and stop them from harassing you, and communicate with them in a professional manner.
Handling Travel Bans and Cheque Cases
If there are any cases related to bounced cheques or travel bans, a lawyer helps you overcome these problems by taking you through the legal process to ease your troubles.
Who Can Apply for Personal Insolvency in the UAE?
The Insolvency Law applies to any person living in the UAE or having debts in the UAE, as long as they are not a trader under the UAE Commercial Transactions Code.
The law usually covers:
- Salaried employees who cannot pay their loans or credit card bills
- People who lost income because of job loss, health problems, or other personal issues
- Individuals with many personal debts from different banks or lenders
- Individuals who borrowed for personal or family needs and cannot repay
- Residents with unpaid debts who may face legal action from creditors
- People who issued cheques that bounced because of money problems
A person cannot use this law if they run a business and are considered a trader. Traders must use the Bankruptcy Law instead.
Documents Needed to Start a Personal Insolvency Case
In order to start a personal insolvency case, there are a few documents needed by the UAE courts. These include:
- Financial Memo: This is a short report stating your money situation and your income.
- List of Creditors: This includes a list of all those to whom you are obligated and how much money they are owed.
- Asset List: This includes a list of everything you own, such as cars, properties, and bank accounts, both inside and outside the UAE.
- Legal Statement: This includes any court cases or police reports filed against you.
- Proposed Plan: This includes your simple idea of how you plan to pay your debts.
- Nomination of Experts: This includes your idea of experts to help manage your case.
The Process of Filing for Personal Insolvency in Dubai, UAE
Filing for insolvency is a step-by-step court process. Our Dubai insolvency lawyers guide you through every stage:
Preparing the Application
We help you collect all required papers. You must give a full list of your assets, your income, your creditors, and a clear reason why you cannot pay your debts.
Court Review
The Dubai court checks your application. If the court sees you are acting in good faith (meaning you are not hiding money), it will accept your case.
Appointing an Expert
The court appoints a financial expert to deal with your case. Our lawyers work with this expert to ensure that your situation is presented well to the court.
Creating the Settlement Plan
The expert then draws up a settlement plan to help you settle your debts. The plan is valid for a maximum of 3 years. The court then approves the plan, and the banks are required to comply with it after that.
Completion
Once you have completed the program, your debts are cleared, and you can start afresh.
Services Offered by HHS Lawyers for Personal Insolvency in UAE
At HHS Lawyers, our personal insolvency lawyer in Dubai offers a number of services to help individuals in the UAE who are struggling with debt. The services are:
- Debt restructuring negotiations: We talk to your bank to reduce the interest rate or extend the time to settle the debt.
- Filing insolvency applications: We help you file your insolvency application and ensure that everything is filled out correctly.
- Representation in Dubai courts: We are licensed lawyers and will represent you in court, explaining your situation to the judge.
- Removal of travel bans and arrest warrants: If you have any cases involving bouncing cheques or unpaid loans, we help you clear these problems.
- Asset protection advice: We also advise you on the assets that are protected and how to deal with your assets.
- Expert consultation: We also give you a consultation that explains to you what is going to happen to your credit score, your job, your future and your family.
FAQ’s
Q1: Does this law apply if I have business debts?
The law is only for people who are not traders. If you run a business as a trader, your business debts follow the Bankruptcy Law (Decree-Law 9 of 2016). Your personal debts may still fall under the Insolvency Law, depending on what the debt is for.
Q2: Will I go to jail if I cannot pay my debts?
If the court declares you insolvent, you cannot be jailed just because you cannot pay. But issues like bounced cheques may still continue unless the court decides to stop them.
Q3: What happens to my assets during insolvency?
When the court starts the settlement process, all actions against your assets stop. If settlement fails and liquidation starts, a trustee will sell your assets and pay creditors in the order the law says.
Q4: Can creditors commence insolvency against me?
Yes. The creditor or a group of creditors who are owed at least AED 200,000 can ask the court to start insolvency and liquidation if the creditor has given the debtor a notice to fulfil the due debt and the debtor did not pay within fifty (50) consecutive working days as of the date of the notice. Only you can start the process of voluntary settlement.
Q5: How long does it take to be rehabilitated after insolvency?
You are automatically rehabilitated 3 years after the judgment of insolvency. This can be earlier if you pay 50% or 75% of the debt, or if all creditors agree to let you go.
Q6: What does the court expert do?
The expert will look at your papers, calculate your debt, create a payment plan, and ensure the plan is followed.
Q7: Can I still work and manage my money during insolvency?
Yes. The law is designed to ensure that you can continue working and living your normal life while going through the process of solving your debt problems.
Contact HHS Lawyers Today for a Private Consultation
Don’t let debt ruin your life. UAE law protects you, and HHS Lawyers are here to make sure the law works for you. Whether you need a personal insolvency lawyer in Dubai to file a court case, or you just need simple advice on how to deal with your banks, we are ready to help.
