Court declares man insolvent

DUBAI: Dubai Civil Court of Appeal declared a debtor insolvent, prevented him from obtaining any new loan or financing, and prevented him from indulging in any financial obligations except what is necessary to meet his essential needs or the needs of his dependents for a period of 3 years from the date of the verdict.

Details of the case date back to the time when a debtor filed a lawsuit requesting the court to assign an insolvency trustee to initiate insolvency procedures and liquidate his funds in accordance with Federal Decree Law No.19 of 2019 regarding insolvency, and then declare him an insolvent.

The Dubai Civil Court of First Instance looked into the case and tasked an expert who prepared detailed reports on the debtor’s financial situation and the court rejected the insolvency request due to the debtor’s inability to pay the expert fees and expenses of the lawsuit.

The debtor appealed the verdict and Dubai Court of Appeal decided that he was unable to pay his obligations, which exceeded Dhs100,000 (a debt to only one bank) as well as other amounts to other banks and real estate agencies. The court added that he did not have money to pay his debts, and therefore declared his insolvency and allowed him to work for only Dhs5,000 to meet his own basic needs and the needs of his dependents. The debtor asked the court to raise the amount to Dhs12,000, but the court rejected his request. The court also prevented him from obtaining loans for a period of 3 years and from working in any supervisory position.