How to Use the New UAE Insolvency Law: Your Financial Recovery Plan

The UAE Insolvency Law (Federal Decree-Law No. 19 of 2019), as reinforced by the Financial Restructuring and Bankruptcy Law (Federal Decree-Law No. 51 of 2023), which came into full effect in May 2024, represents a major shift in how the UAE handles personal debt. For the first time in 2026, residents have a robust digital framework to rehabilitate their financial status rather than facing punitive measures.

Below is the structured process for filing Financial Settlement Proceedings as a non-merchant (civilian), updated with the latest 2026 procedural nuances.

Phase 1: The Preliminary Assessment

Before approaching the court, you must ensure you meet the legal thresholds:

• The 50-Day Rule: You must have ceased paying your debts for more than 50 consecutive working days due to financial inability.
• The Debt Threshold: While you can apply for settlement at any amount, creditors can only initiate involuntary proceedings against you if your total debt exceeds AED 1,000,000 (up from AED 200,000 in the 2019 law).

Phase 2: Filing the Application (Step-by-Step)

Step 1: Digital Submission

In 2026, most insolvency applications are filed through the Ministry of Justice or Dubai Courts (Smart Services) portals. You must register a case specifically under "Financial Settlement of Natural Persons."

Step 2: Mandatory Documentation

You must provide a comprehensive "Financial Truth" folder. Missing documents can lead to immediate rejection.

1. Financial Memorandum: A description of your current position, professional status, and 12-month liquidity projections.
2. Creditor List: Full names, addresses, debt amounts, and maturity dates for all creditors.
3. Asset Inventory: A detailed list of all movable and immovable property (cars, real estate, stocks) inside and outside the UAE.
4. Legal Statement: Details of any ongoing travel bans, police cases, or civil lawsuits against you.
5. Subsistence Requirement: A statement identifying the funds necessary for you and your family’s basic living expenses.
6. The 12-Month Disclosure: A report of all financial transfers made outside the UAE in the last 12 months.

Step 3: Financial Guarantee (The 5% Deposit)

Under Cabinet Resolution No. 94 of 2024, you are now required to submit a deposit or bank guarantee equivalent to 5% of your total debt to cover initial court and expert fees. If you are genuinely indigent, you may petition the court for a fee delay.

Phase 3: The Court Review & Expert Appointment

Step 4: The 5-Day Decision Window

The court must decide whether to accept your application within five working days.

• If Accepted: All current execution proceedings (including travel bans and asset freezes related to these debts) are typically stayed.
• If Rejected: You have the right to appeal to the Court of Appeal.

Step 5: Role of the Appointed Expert

The court will appoint a specialized financial expert. Their role is:

• To audit your financial claims.
• To verify creditor documents.
• To draft a Repayment Plan in consultation with you.

Phase 4: The Settlement Plan (The 3-Year Rule)

Step 6: Voting and Implementation

• The expert submits a report within 20 days.
• Creditors vote on the plan. In the 2024/2026 framework, approval usually requires a majority (or two-thirds in certain restructuring cases) to move forward.
• The standard plan duration is three years, though it can be extended by an additional three years with creditor consent.

Step 7: Discharge and Completion

Once the plan is successfully implemented and debts are cleared according to the agreed terms, the court will issue a decision to close the proceedings and rehabilitate your credit status.

⚠️ Critical Grounds for Rejection

Your application will be rejected or declared null if:

1. Concealment: You are found to have hidden assets or destroyed financial records.
2. Falsehood: You provided false statements regarding your debts or income.
3. Default Duration: You have not reached the 50-day non-payment threshold (unless you can prove anticipated insolvency).

Strategic Advice for your Blog Update:

Highlight that the 2024/2026 amendments prioritize the "Financial Guarantee" and "Digital Filing." Ensure your readers understand that this law is a shield, not a loophole—it requires total financial transparency to work.

🔖 #UAEInsolvencyLaw #DebtReliefUAE #FinancialRehabilitation #DubaiCourts #UAELaw2026 #LegacyPlanning

U.A.E Civil Verdicts can be Executed in India

U.A.E Civil Verdicts can be Executed in India

India on January 18 issued a gazette notification declaring the UAE as a "reciprocating territory" for the Code of Civil Procedure and identifying the superior courts here, thereby facilitating the execution of UAE civil court orders through Indian courts.

The Indian Ministry of Law and Justice on January 18 published the notification, dated January 17, in the official gazette.

“In exercise of the powers conferred by Explanation 1 to section 44A of the Code of Civil Procedure, 1908 (5 of 1908), the Central Government hereby declares the United Arab Emirates to be a reciprocating territory for the purposes of the said section and the following Courts in the United Arab Emirates to be superior Courts of that territory,” the notification reads.

The UAE had given effect to the treaty by publishing it in the Federal Gazette pursuant to Federal Decree No. 33 of 2000, according to a 2018 Guidance Note signed by DIFC with Nishith Desai Associates, covering enforcement of civil and commercial judgments through DIFC Courts and the Courts of India.

It said though the ratification of the agreement was exchanged in 2000, the treaty could not be fully implemented as the UAE could not be defined as a “reciprocating territory” for the execution of UAE judgments in India without India’s notification in its Official Gazette to give effect to the treaty.

This move would help in the enforcement of civil and commercial court verdicts in financial cases such as loan defaults, bounced cheques as well as verdicts in divorce cases.

This will be a big warning to those who flee to India after taking huge loans from banks. Earlier, most of the banks and individuals found it difficult to recover their money if the accused had fled to India.
Now, the Verdict holder can approach the district courts in India directly seeking execution of the UAE court orders after due process of attestation of documents.

List of UAE courts whose verdicts can be executed in India

•     Federal Supreme Court
•     Federal, First Instance and Appeals Courts in the Emirates of Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Fujairah.
•     Abu Dhabi Judicial Department
•     Dubai Courts
•     Ras Al Khaimah Judicial Department
•     Courts of Abu Dhabi Global Markets
•     Courts of Dubai International Financial Centre

UAE announced Five-year Multiple-entry Tourist Visa

Image Credit Dubai Media office

On 6th, January 2020, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai announced tourist visas in the UAE will now be issued for five years.

This announcement on his official Twitter account. Officials say the terms and conditions for obtaining the new visa will remain the same. Holders of the new five-year multiple-entry tourist visa may be allowed to stay for six months at a stretch, sources have confirmed.

about the eligibility of getting the new visa sources said that while details of the new five-year validity tourist visa will be announced soon, it is being proposed that the visa will allow visitors to stay for up to six months on every entry within the span of five-year validity.
The business community and ex-pats welcomed the move by the UAE government and expressed this move will help tourism and business.

UAE Insolvancy Law now in effect

                                                                                                                                                            Image provide by WAM

Under the new Insolvency law, people won’t be jailed for a bounced cheque, instead, a debtor can now approach a civil court in the emirate they reside in and invoke their insolvency status.

Once the court declared insolvent, the civil court will appoint financial experts to come up with a long-term payment plan with the debtor and creditor. Payments can be done through direct payments to the creditor or by assets owned.

When the payment plan in place, debtors will not face any legal prosecution during that period, and will also have the criminal case against them wiped out once all payments have been completed so they won’t have any criminal record against them

How the new UAE insolvancy law will help debt-ridden residents

The law addresses debtors' inability to pay their debts due to bankruptcy and debt default.An insolvency law that was approved by the UAE Cabinet will protect debtors' dignity and gives them the opportunity to manage their finances, the Ministry of Finance has said. The ministry explained how the law will be applied; how debtors can settle their dues; and what documents they will need to submit.

Purpose of the law

The Insolvency Law of Natural Persons addresses debtors' inability to pay their debts due to bankruptcy and debt default. This is known as the 'insolvency of the natural person'. The regulation of this case is linked to the Civil Transactions Act, in accordance with a principle called 'Facilitator's View'. The latter is rooted in Islamic jurisprudence, whereby debtors are granted a reasonable period of time to fulfil their financial obligations. However, this is done provided that such a delay does not cause serious harm to the creditor.

Insolvency law vs bankruptcy law

The insolvency law applies to a natural person who is not engaged in economic activity and is not a trader. However, the primary purpose of both laws is the same: Both exist to protect the common interests of the creditor and the debtor in a fair and balanced manner. The risk is divided between them in such a way so as to alleviate the debtors from the cycle of financial difficulties and enable them to pay off their accumulated debt.

How the law will help
Specialised rules governing the insolvency of a natural person are expected to increase transparency on civil debt repayment transactions and increase the general security of financial transactions, thus enhancing financial stability in the country. It is also expected to accelerate growth and make it easier for individuals to obtain loans, as there are clear rules that are easy to apply to collect bad debts and rehabilitate the debtor financially. This enhances creditor banks' confidence in retail lending and encourages individuals to engage in calculated borrowing. In addition to all its economic objectives, the law has another positive aspect to it: It ensures the protection of the debtors' dignity and helps create an opportunity for them to manage their finances and reduce financial burdens.

Will it affect the economy

The law will bolster the economic stability of the nation and provide a secure environment for personal loans to the contentment of both the creditor and the debtor. The law provides the necessary balance to guarantee the rights of creditors and debtors and encourages increased cash flows.

How long will the court take to decide
The court shall decide on the application (without notice or plea) within five working days from the date of submission of the application.

What happens next?

The decision of the court shall cease the obligation of the debtor to apply for insolvency and the liquidation of their property. Suspension of execution shall continue during the period of settlement of financial obligations unless the debtor breaches obligations.

Appointing experts

In the decision to open a settlement of financial obligations, the court shall appoint one or more experts to assist the debtor in settling financial obligations. The expert shall not be a creditor of the debtor or be associated with them in any interest, or kinship until the fourth degree.

Steps experts will take

The expert shall prepare a plan in cooperation with the debtor, provide the creditors with a copy, and deposit a copy with the court within 22 working days, from the date of the court's decision to instruct the expert to prepare the plan. The court may authorise an extension of the submission period if the need arises.

The expert shall invite the debtor and creditors to one or more meetings, specifying the time and place of the meeting, to discuss and vote on the plan.

They shall be invited to attend the meeting by any means of communication as deemed appropriate.

The first meeting shall be held within 10 working days from the date of providing the creditors with a copy of the plan. The debtor and creditor shall attend the meeting in person, or by someone authorised on their behalf.

Who is not eligible to vote on the plan

• The debtor's spouse
• Any person financially supported by the debtor
• Relatives of the debtor up to the second degree.
  

Duration of executing the plan
The proposed period for the execution of the plan may not exceed three years from the date of the ratification.

Can the plan be amended

Yes, amendments may be made. The expert shall request the court to approve the amendments. The court shall, before deciding on the application, notify all creditors who may be affected by such amendments; and authorise or reject them.

Invalidation of plan

The court shall decide on the termination of the financial settlement of the debtor in the following cases:

• If it finds that the debtor's financial obligations cannot be settled
• If it is impossible to implement the plan because the debtor ceases to pay any of their debts on due dates for more than 40 consecutive working days, as a result of their failure to meet these debts
• If the debtor requests the court to terminate the execution of the plan before the settlement of financial obligations with creditors
• If the period specified for the implementation of the plan expires without the settlement of financial obligations of the debtor
• If the debtor fails to follow the plan.

The approved plan will be nullified if the court finds that the debtor is evading, or attempting to evade, fulfilling their obligations.

Secretary to liquidate assets

The court shall appoint a secretary if it decides to open the procedures of insolvency of the debtor and the liquidation of their funds.

Functions of the secretary

The secretary shall finalise the claims of creditors and prepare a report on the financial situation of the debtor and deliver it to the court within 10 working days from the end of the specified period, which is 20 working days. The court may extend it for a similar period once more.

Replacing the expert or secretary

The court may replace the expert or the secretary upon the request of the creditor or the debtor if it is proved that their continued appointment may harm the interests of either the creditors or the debtor or both.

Judicial decision on insolvency

The court shall decide on the insolvency of the debtor and the liquidation of their assets within 15 days from the date of receiving the secretary's report.

Time the debtor gets

The court may, upon the recommendation of the secretary and the debtor's request, before commencing the liquidation of the debtor's funds, decide to grant the debtor a term under the secretary's supervision of no more than three months. This is extendable by a similar period to reach an amicable settlement with the creditors, provided that this does not prejudice the interest of creditors.

Appealing the term

Any of the creditors may appeal the court's decision to grant the debtor a time for amicable settlement before the Court of Appeal. The appeal shall not result in the suspension of the proceedings and the decision issued in the appeal shall be considered final.

Penal provisions

Dh20,000 to Dh60,000 fine, imprisonment for debtors if:

• They spend large sums of money in a speculative business that is not required
• They purchase services, goods or materials for personal or domestic use
• They gamble

Dispose of their funds at less than the market price

Dh10,000 to Dh100,000 fine, jail for creditors if:

• They make a claim relating to a fake or sham debt against the debtor
• They increase the debts to the debtor illegally.