July 26, 2021 real estate

Seizure and summons lifted for 80,000 debtors as Bankruptcy law enters into force

The Preventive Settlement, Restructuring and Bankruptcy Law was enforced yesterday, Saturday, This would lift seizure and summons decisions issued against 80,000 defaulting debtors, Al-Rai daily reported.

The economists and jurists are divided between supporters and opponents of the abolition of seizure and habeas corpus against defaulting debtors. The supportive group affirms that the law reorganizes the legal framework for bankruptcy provisions and the rules for restructuring debts and protecting troubled companies. The provisions of the law are consistent with international best practices, explaining the abolition of seizures.

The habeas corpus goes along with the International Covenant on Civil and Political Rights (New York Convention) and the Arab Charter on Human Rights, and that the imprisonment of individuals because of a civil or commercial debt is no longer practiced in developed countries, whether Western or Arab.

The abolition of imprisonment of debtors for commercial and civil debts has a significant positive impact on Citizens engaged in trade, as the bonafide bankrupt is not viewed with a punitive view, but rather it gives him more freedom to pay what he owes, such as allowing him to open another project, run for office, or apply for a job.

On the other hand, opposers of the law point out that the new law abolished Article 292 of the Procedure Code, on which the decisions to seize and subpoena and imprison debtors are based on refraining from executing all civil rulings, which will eliminate the most important means of pressure on debtors to repay what they owe.

Even though the new law applies other enforcement procedures against debtors who fail to implement judicial rulings, such as the seizure of bank accounts, travel bans, vehicle seizures, real estate seizures, and movables and shares seizures.


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