Muscat: Individuals and companies that declare bankruptcy in Oman need to pay back their creditors — in a manner that will be agreed through a payment restructuring plan — as part of the new Bankruptcy and Insolvency Law that will come into effect in 2020. Under this law, which was issued under Royal Decree number 53/2019 and will come into effect on 1 July 2020, those who have borrowed money from people but are unable to pay it back need to pay it back as part of restructuring, which has been agreed upon by the bankrupt individual or company as well as those from their creditors.
This restructuring plan must be agreed upon by both the bankrupt party and their creditors, and must be ratified by a court of law.
In this context, Mohamad bin Rashid Al Badi, the acting director of the Legal Department at the Ministry of Commerce and Industry (MoCI), said: “The aforementioned bankruptcy law allows the debtor to request a protective settlement if his financial business is disturbed which would lead to the suspension of payment of his debts and his heirs may also apply for protective reconciliation if they decide to continue trading.
"The competent court shall set forth the reasons for the disturbance of the financial work, along with the proposals for reconciliation and the guarantees of their execution. All supporting documents shall be enclosed in the application,” he said.
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