A federal law has been passed by the UAE Cabinet to legalize insolvency and safeguard those who are unable to pay their obligations from going bankrupt. According to a new UAE law, debtors would be shielded from criminal prosecution and instead given assistance to recover their debts within three years. The new law will safeguard debtors from legal action, decriminalize insolvent persons\’ financial obligations, and let them work, be productive, and provide for their families.

It will assist people who are experiencing or are expecting financial challenges that would prevent them from repaying their obligations. Individuals will be able to renegotiate their debts and will be able to apply for new low-interest loans.

The rules aim to improve the UAE\’s competitiveness by assuring ease of doing business, establishing favorable conditions for persons facing financial difficulties, and safeguarding those who are unable to pay their obligations from becoming bankrupt.

The law, which supplements current financial rules, will help to greater openness in civil debt payback transactions and, as a result, will reinforce the UAE\’s image as an excellent investment hub where all parties\’ rights are protected.