Dubai court declares woman insolvent over Dhs425,000 debt

The Dubai Civil Court declared an Arab woman insolvent after she accumulated debts of Dhs425,000 to several banks and institutions. The court found that she was unable to meet her financial obligations or repay her debts. The court imposed a series of regulatory and oversight measures, including a travel ban and notification of the relevant authorities and the Al Etihad Credit Bureau, to register the ruling in the designated registry.

Specifically, an Arab woman filed a lawsuit with the Dubai Civil Court, requesting that she be declared insolvent and that proceedings be initiated. She explained that she was unable to pay her debts due to various financial obligations and insufficient income or assets. After reviewing the lawsuit, the court issued a preliminary decision to accept the request and initiate insolvency proceedings. The court also appointed a specialist trustee to review the debtor's financial assets and prepare a comprehensive report detailing the debts and available funds. This report will be published in two local newspapers, inviting creditors to submit their claims.

The specialist's report indicated that the city's total debts amounted to approximately Dhs425,905, distributed among several entities. This includes debts owed to a bank, an unpaid cheque debt, an outstanding credit card balance and private school tuition fees totalling Dhs14,758.

The report confirmed that the woman does not own any real estate or vehicles, nor does she hold any other financial assets that could be seized. She is also not employed or engaged in any other productive professional activity. It also noted that her monthly salary of Dhs14,000 is insufficient to cover her basic living expenses, let alone her debts.

The Court therefore declared the woman insolvent, opening proceedings and halting all creditor actions against her. She was prohibited from obtaining any new loans or financing for a period of three years and from entering into any obligations, whether for a fee or not, except to the extent necessary to meet her basic needs.

Dr. Alaa Nasr, the legal representative of the insolvent woman, said that the insolvency law includes a procedural system aimed at helping the debtor fulfil their debts. This involves appointing an expert to help identify and audit the debtor's debts, and liquidate their assets, from the date the insolvency application is accepted and the procedures initiated, until the ruling declaring insolvency is made.

Dr. Nasr pointed out that the law grants several advantages to the debtor during this period, including protection from legal action and the halting of all judicial enforcement procedures against his/her assets. However, in order to enjoy this protection, the debtor must be honest and transparent, fully disclosing his/her assets and rights to others and identifying the real debts on his/her account.