Conditions for Declaring Individual Insolvency in the UAE

Conditions for Declaring Individual Insolvency in the UAE

Under UAE Federal Decree-Law No. 19 of 2019 on Insolvency, as amended by Cabinet Resolution No. 47 of 2021, an individual debtor may be subject to insolvency and asset liquidation proceedings when they are unable to meet their due financial obligations.

A debtor is required to apply to the competent court where they have ceased paying due debts for more than 65 consecutive working days due to an inability to pay, provided that the debt amount requiring such application reaches AED 250,000.

The application must be supported by information and documents concerning the debtor’s financial position, creditors, outstanding debts, assets, income, and the reasons for the inability to pay.

Once the legal requirements are satisfied, the court may open insolvency and liquidation proceedings and appoint a trustee to administer the debtor’s assets in accordance with the law.