A new bankruptcy law in Oman will establish rules and regulations governing bankruptcy filing and help people emerge from it quickly, according to local media reports.
According to a report in the Times of Oman, the new regulations – which come into effect on July 1, 2020 – set the conditions for bankrupt parties to pay off creditors according to a previously agreed upon restructuring plan.
“The debtor who has stopped paying his debts can apply to the audit and control of commercial establishments department at the Ministry of Commerce and Industry (MoCI) to request restructuring through settling the disputes with creditors, provided the debtor continued his business during the two years preceding the filing of the application and that no final judgement has been issued against him towards declaring bankruptcy,” said Mohamad bin Rashid Al Badi, the acting director of the MoCI’s legal department.
According to Al Badi, the inheritors of the debtor have the right to apply the same request one year from the date of a debtor’s death, as long as the company is not in the process of liquidation and the debtor has continued to manage his funds and stick to obligations and contracts during the restructuring plan.
In order to settle disputes between creditors and debtors, ‘the competent department’ must hold mediation sessions, the Times of Oman report noted.
“The aforementioned bankruptcy law allows the debtor to request a protective settlement if his financial business is disturbed which would lead to his suspension of payment of his debts and his heirs may apply for protective reconciliation if they decide to continue trading,” Al Badi said.
Additionally, Al Badi said that the new bankruptcy law means that bankruptcy cases shall not arise except by court rulings, without which debts will have to be repaid unless the law provides otherwise.
In cases in which traders falsely pretend bankruptcy courts will impose fines or between 20 and 500 Omani riyals.
Source:https://www.arabianbusiness.com/politics-economics/430903-oman-to-introduce-new-bankruptcy-regulations-in-2020