It is a must that the laws go through a good revision and sense some changes in them. After the huge chaos of the pandemic due to Covid-19, this was a mandatory action to take. It is no lie that tons and tons of businesses were gone because of the pandemic and the lockdown. Most of the businesses did not have enough earnings and funds either. Therefore, this created a huge loss for numerous businesses, and it resulted in a major downfall. Therefore, it is important not just for the business to take care of its cash inflows, outflows, inventory, and revenue but also for the government. There is some set of laws that limit the reach of businesses and also play a part in their closure. Therefore, the laws of debt collection lawsuits and judgments are now changing with time.
The major reason being of the strong wave of Covid-19. The laws now grant more free time to debtors. Now, by looking at the new law, the debtors have 12 months to clear away all of the things that they owe. Some of the laws are applicable to the creditor as well. This is that the creditor will not be able to interfere with the debtor’s revenue during the 12-month time frame.
The debt repayment process in UAE
There are tons of different ways in which matters that involve debt can settle down. Each country will have its laws and methods. Hence, UAE provides its own two ways how debt repayment process can take place and also how to solve them.
The first method is a calmer way of approach. You can have a good set of negotiations that requires both parties to accept the same element. Otherwise, you can also go for some extrajudicial procedures. This mainly involves when the parties meet and agree on something. In this case, they will agree on a repayment structure. None of the parties will have to go to court for this because it will be on a mutual agreement and mutual basis.
They can try to protect their money through authentic and appropriate negotiation. This will solve their debt problems as well. A private investigation is also permissible on the company of the debtor. Through this investigation, they can also find out how much they can pay. This will help in sorting out the negotiation more and being considerable.
There are other ways as well that can solve problems. The second way of resolving this issue is by going to court. Hence, you will need to go through court proceedings if you are not going to choose the first option. The main reason why cases as such end up in court are because they do not come up with satisfactory results. Therefore, the law will take over, and it will give judgments accordingly.
You will need to have a good lawyer as well so that you can clear away with the court proceedings. The lawyer should know about the laws and should have knowledge as well about the business. Moreover, the debtor should know about the PCP. This is a Preventive Composition Procedure that helps during the legal framework. It helps the debtor to reach out to the court to show the statistical status of your business. Therefore, in a way, this is how the debtor can claim to say that they need more time. However, this option is available to those debtors who did not fail to repay for not more than a month or 30 days.
The explanation of the new debt laws in UAE
The laws that govern are still strict and do not do much. However, the changes that are brought benefit the debtors so that they do not go out of business. Therefore, the laws make things a bit easier for debtors. There are several different cases where businesses had to shut down because of their debts. This was mainly seen during the time of the coronavirus. Moreover, depending on the business and the type of business, public or private, they will have to look at their liability as well. It is common to see businesses in debt and closing down. The after-effects of the coronavirus are still there. The reason why businesses are not able to pick up is because of the huge gap loss. Hence, it is not easy to fill it in within a short amount of time.
People who only live off having their business and suddenly shutting it down will have a huge negative impact on their life as well. Therefore, there are some companies who are selling their private assets to give back the loans while others as hustling to get through. Hence, the new laws of the UAE make this a smooth process. It helps businesses pay back their debt easily. This is so that there is no form of closure. This will also help numerous sustain their businesses for the better. There is a major loss of investors as well. Therefore, to not have their investment go to waste, this method will help. The confidence of the investors will also increase, and they will look forward to their next planning.
The main reasons for debts
There are tons of reasons that can result in debt. However, some of the major ones apart from the coronavirus is within the business. Suppose they are not functioning properly and not taking care of their funds. It is a must that businesses have a good list of cash inflows and outflows. Usually, sometimes the debtors will not communicate with the creditors. This is usually a weak and bad sign. Hence, during cases such as this, heading to the court will be the best option by having Gulf Advocates by your side. We have registered trained professionals and know all of the things to look upon for a positive side of your case.