×
    1.General Questions: ​​​
    How do I file for a bankruptcy procedure ?
    Filing for any bankruptcy procedure is available online via the portal for Commercial Judiciary in the Commercial Court>judiciary services>registration>filing for bankruptcy. The service is accessible by visiting the commercial justice system portal on the Ministry of Justice website
    What is the minimum amount of debt that permits a debtor to file for any liquidation procedure?
    The minimum amount of debt that allows a debtor to file for Liquidation Procedure or Liquidation for Small Debtors Procedure is fifty thousand (50,000) Saudi Riyals.
    What is the Bankruptcy Law?
    The Bankruptcy Law aims to enable a debtor to restructure his or her finances and resume commercial activities while protecting the rights of creditors, equalizing between parties of equal rights, maximizing the value of assets, organizing sale, fairly distributing shares, and preserving confidence in the credit market and stock exchange.
    What are the Bankruptcy Procedures identified in the Bankruptcy Law?
    The Bankruptcy Law contains seven main procedures :
    • Preventative Settlement
    • Financial Restructuring
    • Liquidation
    • Preventative Settlement for Small Debtors
    • Financial Restructuring for Small Debtors
    • Liquidation for Small Debtors
    • Administrative Liquidation
    What are the objectives of Bankruptcy Procedures ?
    The Bankruptcy Procedures aim to achieve the following:
    • Allow the bankrupt, distressed, or potentially distressed debtor to benefit from the bankruptcy procedures so that he or she can reorganize his or her finances, resume financial activities and contribute to economy and economic growth.
    • Maintain the rights of creditors fairly and ensuring impartial treatment of parties involved.
    • Maximizing the value of bankruptcy assets, organizing sale, and ensuring fair distribution to creditors during liquidation.
    • Reducing the costs and time period of the procedures while increasing efficiency- particularly during the financial restructuring for small debtors or selling bankruptcy assets - and fairly distributing shares among creditors within a specified period of time.
    • Liquidating the Administration of small debtors whose value of assets is insufficient to cover the costs of the liquidation procedure or liquidation for small debtors.
    Who is considered a small debtor?
    In accordance with the regulations of the Law and Regulations of Bankruptcy, a small debtor is one whose debt does not exceed two million Saudi Riyals (2,000,000) when bankruptcy procedures take place.
    Who does the Bankruptcy Law apply to?
    The Bankruptcy Law contains seven main procedures :
    • A natural person involved in commercial, professional, or for-profit activities in Saudi Arabia.
    • Commercial or professional companies, organizational entities and other for-profit companies and entities that are registered in Saudi Arabia.
    • A natural or legal Non-Saudi investor with assets in Saudi Arabia conducting business or for-profit activities via a registered establishment in Saudi Arabia. The Law applies only to the investor’s assets in Saudi Arabia.
    How does the officeholder annotate the Preventative Settlement proposal as stated in Article (32) in the Law Implementing Regulations?
    To fulfill the annotating requirement, the listed officeholder is required only to annotate the first page of the proposal affirming its compliance with the requirements mentioned in Article (16) of the Implementing Regulations. The officeholder signs and dates the proposal and retains a signed copy.
    What are the Commission’s competences?
    In accordance with Article (9) Paragraph (2) in the Law, the Bankruptcy Commission - in addition to the technical and administrative functions provided herein - shall have the following competences:
    • Issuing and managing the Bankruptcy Register
    • Licensing bankruptcy officeholders and experts in accordance with the Regulations
    • Preparing a Bankruptcy Officeholders and experts list in accordance with the Regulations
    • Issuing the rules governing the work of Bankruptcy Officeholders and experts
    • Conducting inspections and verifications in respect of any Bankruptcy Procedures implemented in accordance with the provisions hereof
    • Submitting recommendations to the Minister regarding updating the list of Regulated entities, in coordination with the competent authorities
    • Setting out the Small Debtors standards in coordination with the General Authority for Small and Medium Enterprises
    • Determining the minimum debt amount of the debt that gives Creditors the right to request the initiation of liquidation proceedings
    • Managing Administrative Liquidation Procedures
    • Issuing, maintaining and managing the register provided for in Article (204) (2) hereof
    • Issuing the forms and documents provided for in the Implementing Regulations
    • Organizing and sponsoring initiatives to increase awareness about the Law
    • Making the necessary proposals to enhance the effective implementation and development of the provisions hereof, including conducting studies and research
    • Conducting activities and participating in the events relevant to its competences
    • Conducting periodic reviews of the provisions of the Law and its Regulations, as well as the relevant rules and instructions, and propose any amendments to the Minister in coordination with the competent authorities
    • Provisions of consultations, services and training with or without a consideration
    • Publishing the rules of archiving and managing the Bankruptcy Register mentioned in article (204) Paragraph (2)
    • Issuing the rules of licensing bankruptcy officeholders and experts
    • Issuing the regulations of officeholders’ duties in collaboration with the Ministry of Justice
    • Issuing the regulations of professional conduct for bankruptcy officeholders and experts
    • Issuing the regulations of inspection and investigation
    • Issuing the regulations of nominating bankruptcy officeholders and experts in collaboration with the Ministry of Justice
    • Any other competences specified in the Implementing Regulations or the Decision of forming the Commission
    Who is the Bankruptcy Officeholder?
    A bankruptcy officeholder is an officeholder appointed by the Court or an applicant – as the case may be – to perform the tasks and duties entrusted to him in accordance with the type of procedure . This includes the Financial Restructuring Officeholder and the Liquidation Officeholder.
    When will the Court look into Protective Settlements, Financial Restructuring or Liquidation Requests? What is the outcome?
    The Court will schedule a hearing to look into preventative settlement requests within forty days from receiving the request. The Court will determine one the following:
    • To proceed with the request and schedule a hearing
    • To deny the request
    • To reschedule the hearing
    Which court is in charge of bankruptcy requests?
    According to the Bankruptcy Law, the Commercial Court is in charge of bankruptcy requests.
    How can I announce a judgment, decision, or procedure mentioned in the Law and Implementing Regulations of Bankruptcy?
    Announcing any judgment, decision or procedure In accordance with the Law or Regulations of Bankruptcy is available via the following online form
    How can the officeholder, or debtor report judgments, decisions, or procedures in the Law and Implementing Regulations of the Bankruptcy Law?
    In accordance with the Law and Regulations of Bankruptcy, the officeholder or debtor can report a judgment, decision or procedures via the following online form
    When will the procedure for suspending claims occur?
    This procedure is linked to bankruptcy procedures mentioned in the Bankruptcy Law if it included cases of suspending claims with rules and durations.
    Can a lawyer apply to join the initial list of bankruptcy officeholders?
    Yes, a lawyer can apply to join the initial list of bankruptcy officeholders provided he or she fulfills the requirements stated in the Counsel of Ministers’ resolution number (622) dated 24/12/1439 A.H. As per the requirement of occupational or educational certificate in accounting, - accredited from the Saudi Association for Certified Public Accountants – the lawyer can apply for a certificate prior or after receiving the lawyer’s license.. To see the Counsel of Minister’s resolution (622) dated 24/12/1439 A.H (05/09/2018 A.D.). click here
    Please contact the Saudi Association for Certified Public Accountants for questions about accreditation through : ‎‏info@socpa.org.sa
    Has the Bankruptcy Law been applied yet?
    Yes, the Bankruptcy Law has been applied as of Monday 16/12/1439 A.H. (conquering with 27/8/2018 A.D.)
    2.Protective Settlement
    How would the officeholder annotate a proposal in a Protective Settlement claim as stated in Article (32) in the Implementing Regulations?
    To fulfill the annotating requirement, the listed officeholder is required only to annotate the first page of the proposal affirming its compliance with the requirements mentioned in Article (16) from of the Implementing Regulations. The officeholder is to sign and date the proposal and retains a signed copy.
    Who is eligible to file for a Protective Settlement Procedure ?
    The debtor is eligible to file for a Protective Settlement Procedure through Court.
    When can the debtor file for a Protective Settlement Procedure ?
    Without prejudice to related regulations, the debtor can apply for Protective Settlement at Court in one of the following cases:
    • If the debtor is likely to face financial instability that might lead to financial distress
    • If the debtor is financially distressed
    • If the debtor is bankrupt
    When will the Court look into Protective Settlement requests?
    The Court will schedule a hearing to look into Protective settlement requests within forty days from receiving the request. The Court will determine one the following:
    • To proceed with the request and schedule a hearing
    • To deny the request
    • To reschedule the hearing
    3.Financial Restructuring
    Who is eligible to file for Financial Restructuring?
    The debtor, the creditor, or the concerned party is eligible to file for Financial Restructuring at Court.
    When can the debtor file for Financial Restructuring Procedure ?
    Without prejudice to related regulations, the debtor can file for a Financial Restructuring Procedure at Court in one of the following cases:
    • If the debtor is likely to face financial instability that might lead to financial distress
    • If the deter is financially distressed
    • If the debtor is bankrupt
    Can anyone other than the debtor file for Financial Restructuring Procedure ?
    Yes. If a non-debtor files for a Financial Restructuring Procedure , the Court will notify the debtor within five days after receiving the filed request.
    When will the Court look into Financial Restructuring requests?
    The Court will schedule a hearing to look into Financial Restructuring requests within forty days after receiving the request. The Court will determine one the following:
    • To proceed with the request and schedule a hearing
    • To deny the request
    • To reschedule the hearing
4.Liquidation Procedure ​
What is the minimum amount of debt that permits a debtor to file for any liquidation procedure?
The minimum amount of debt that allows a debtor to file for Liquidation Procedure or Liquidation for Small Debtors Procedure is fifty thousand (50,000) Saudi Riyals.
Who is eligible to file for the Liquidation Procedure ?
Without prejudice to related regulations ,the debtor, the creditor, or the concerned party is eligible to file for liquidating a bankrupt or financially distressed debtor at Court.
When will the Court look into Liquidation requests?
The Court will schedule a hearing to look into a liquidation request within forty days after receiving the request. The Court will determine one of the following:
  • To proceed with the request and schedule a hearing
  • To deny the request
  • To reschedule the hearing
5.Protective Settlement for Small Debtors
Who is considered a small debtor ?
In accordance with the Bankruptcy Law and Implementing Regulations, a small debtor is one whose debt does not exceed two million Saudi Riyals (2,000,000) when bankruptcy procedures take place.
What is the benefit of Protective Settlement for Small Debtors ?
Protective Settlement for Small Debtors allows small debtors to reach an agreement with their creditors in order to pay off their debt within a reasonable period of time - through a minimal, effective, and low-cost procedure - while maintaining their commercial activities.
Who is eligible to file for Protective Settlement for Small Debtors?
A small debtor is eligible to file for Protective Settlement for Small Debtors at Court.
Can a small debtor file for the Protective Settlement rather Protective Settlement for Small Debtors ?
Yes
6.Financial Restructuring for Small Debtors
Who is considered a small debtor ?
In accordance with the Bankruptcy Law and Implementing Regulations, a small debtor is one whose debt does not exceed two million Saudi Riyals (2,000,000) when bankruptcy procedures take place.
What is the benefit of Financial Restructuring for Small Debtors?
Financial Restructuring for Small Debtors allows small debtors to reach agreements with their creditors to restructure their commercial activities within a reasonable period of time through a minimal, effective and low-cost procedure under the supervision of a bankruptcy officeholder.
Who is eligible to file for Financial Restructuring for Small Debtors ?
The small debtor, the creditor, or the concerned party is eligible to file for Financial Restructuring for Small Debtors at Court if the small debtor is financially distressed or bankrupt and cannot proceed with his/her business, provided that his/her assets are sufficient to cover the costs of the procedure
Can a small debtor file for Financial Restructuring rather than Financial Restructuring for Small Debtors?
Yes
7.Liquidation Procedure for Small Debtors
What is the minimum amount of debt that deems a debtor eligible to file for a Liquidation for a Small Debtors procedure ?
The minimum amount of debt that allows a debtor to file for Liquidation Procedure or Liquidation for Small Debtors Procedure is fifty thousand (50,000) Saudi Riyals.
Who is considered a small debtor ?
In accordance with the Bankruptcy Law and Implementing Regulations , a small debtor is one whose debt does not exceed two million Saudi Riyals (2,000,000) when bankruptcy procedures take place.
What is the benefit of Liquidation for Small Debtors Procedure ?
The Liquidation for Small Debtors Procedure allows small debtors to sell their bankruptcy assets and distribute the returns among creditors within a reasonable period of time through a minimal, effective, and low-cost procedure under the supervision of a bankruptcy officeholder
Who is eligible to file for the Liquidation of Small Debtors Procedure ?
The debtor, creditor, or concerned party is eligible to file for Liquation of Small Debtors Procedure through the Court.
Can the small debtor, creditor or concerned party file for the Liquidation Procedure rather than Liquidation for Small Debtors Procedure ?
Yes
8.Administrative Liquidation
What is the aim of the Administrative Liquidation Procedure ?
​The aim of the Administrative Liquidation Procedure is to sell the bankruptcy assets that are insufficient to cover the costs of liquidation or the Liquidation for Small Debtors Procedure .
Who is eligible to file for the Administrative Liquidation Procedure ?
The debtor, or the competent authority is eligible to file for the Administrative Liquidation Procedure if the debtor is financially distressed or bankrupt, provided that his/her assets are insufficient to cover the costs of the liquidation or the liquidation procedure .