Up to Dh100,000 fine for misusing UAE's insolvency law

Abu Dhabi - Each insolvency debtor shall be punishable by imprisonment for a period not exceeding two years.

The insolvency law that was approved by the UAE Cabinet earlier this week is designed to protect debtors from legal prosecution, decriminalise the financial obligations of insolvent persons, and offer them an opportunity to work, be productive and provide for their families. However, the Ministry of Finance has specified the penalties that will be imposed on those who misuse the law.
Also read: All you need to know about UAE insolvency law

Any creditor who commits any of the following acts shall be liable to imprisonment and a fine of not less than Dh10,000 and not more than Dh100,000:
- If they make a claim relating to a fake or sham debt against the debtor.
- If they increasesthe debts to the debtor illegally.
- If they vote in any meetings on decisions relating to the settlement of financial - If, following the court's decision to commence insolvency proceedings and the liquidation of funds, the debtor knowingly concludes an agreement which gives them special advantage to the detriment of other creditors.
Each insolvency debtor shall be punishable by imprisonment for a period not exceeding two years and/or a fine of not less than Dh20,000 and not exceeding Dh60,000, if the insolvency debtoris proved to cause a loss to creditors as a result of one of the following acts:

The UAE issued the Insolvency Law for Natural Persons to address the inability of a debtor (who is not engaged in economic activity and is not a trader) to pay his debts caused by financial distress, to protect the common interests of the creditor and the debtor in a fair manner. pic.twitter.com/6u9vJwTK9D
- Ministry of Finance (@MOFUAE) November 19, 2019