New laws are on the horizon designed to support “honest debtors in returning to economic productivity.” The Cabinet has approved the Personal Insolvency, Financial Rehabilitation, and Entrepreneurial Rescue Bill 2025, which is set to be presented in Parliament. This new legislation will eliminate the outdated Bankruptcy Act of 1944.
The Bill aims to modernize the approach to personal insolvency, introducing the ‘fresh start’ principle alongside alternatives to formal bankruptcy. Key features of this new law include the establishment of a Debt Rehabilitation Order, which outlines a fast-track process for low-value cases, making it easier for those in financial distress to seek relief.
Another significant aspect is the Debt Restructuring Arrangement, a voluntary option for debtors and creditors to collaborate on restructuring debts and facilitating partial repayments. Additionally, a Debt Protection Moratorium will provide a temporary stay on creditor collection actions for 60 days, allowing debtors time to explore their options and seek assistance.
This new legislative framework aligns with ongoing efforts to enhance economic resilience and support sustainable growth, particularly vital to helping individuals regain financial footing. The introduction of such supportive measures reflects a positive shift towards fostering greater economic empowerment within the community.
In light of similar recent initiatives, such as the Access to Business Funding Bill, which aims to address financial barriers faced by micro, small, and medium enterprises (MSMEs), these comprehensive reforms signal a hopeful commitment from the government to create a more inclusive financial environment conducive to entrepreneurship and economic revitalization in the region.
Leave a comment