Article 21 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 21 من اللائحة التنفيذية لنظام الإفلاس · الفصل الثاني: أحكام مشتركة بين إجراءات الإفلاس: طلب افتتاح إجراء الإفلاس
A natural-person debtor who has not been discharged from a remaining debt must notify creditors if he starts a profit-making activity within 24 months of ending liquidation, and apply to distribute any money that comes to him.
Official text (Arabic)
This article has not been amended since the law was issued.
1- على المدين ذي الصفة الطبيعية -الذي لم يبرأ من دين متبق في ذمته- تبليغ دائنيه عند بدء ممارسته نشاطاً تجارياً أو مهنياً أو يهدف إلى تحقيق الربح خلال (أربعة وعشرين) شهراً من إنهاء أي من إجراءات التصفية.
2- إذا آل مال إلى المدين ذي الصفة الطبيعية -الذي لم يبرأ من دين متبق في ذمته- خلال مدة (أربعة وعشرين) شهراً من إنهاء أي من إجراءات التصفية، فعليه التقدم إلى المحكمة بطلب توزيع ذلك المال -على أن يرفق بطلبه تقريراً من خبير- يتضمن ما يأتي:
أ. مقدار ما يحتفظ به من ذلك المال بما يوفر له ولمن يعولهم ما يكفي لمعيشة بالمعروف.
ب. مقدار ما يحتفظ به من ذلك المال لاستمرار ممارسة نشاطه (إن وجد).
ج. مقدار ما يدفع للدائنين من ذلك المال، كلٌ بحسب حصته وأولويته.
3- إذا لم يتقدم المدين إلى المحكمة وفق أحكام هذه المادة، فللدائن التقدم إلى المحكمة للمطالبة بحقه في المال الذي آل إلى المدين، ولها أن تقضي بأحقية الدائنين في المطالبة بديونهم لدى المحكمة المختصة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 21 explained in plain English
This article of the Implementing Regulations of the Bankruptcy Law deals with the stage after a liquidation procedure ends, and concerns a debtor who is a natural person (that is, an individual) who has not been discharged from a remaining debt, within 24 months of the ending of any of the liquidation procedures.
The first obligation: notice on starting an activity. If the debtor, within this period, starts carrying on a commercial or professional activity or an activity aimed at making a profit, he must notify his creditors.
The second obligation: money that comes to him. If money comes to the debtor within the same period, he must apply to the court for that money to be distributed, and attach to his application an expert's report that includes:
- The amount he keeps of the money to provide for himself and his dependents enough for a decent living.
- The amount he keeps to continue carrying on his activity, if any.
- The amount paid to creditors from that money, each according to his share and priority.
The text thus takes account of the debtor's and his dependents' need for enough for a decent living, alongside the creditors' right to their remaining debts.
If the debtor does not apply: if the debtor does not apply to the court in accordance with this article, a creditor may apply to the court to claim his right to the money that came to the debtor, and the court may rule that the creditors are entitled to claim their debts before the competent court.
Relation to neighboring articles: Article 20 regulates the request to end a bankruptcy procedure, giving notice of it and objecting to it, and the 24-month period in this article starts from the ending of any of the liquidation procedures. Article 22 regulates the trustee's starting his duties and handing over to the debtor what he holds immediately on the procedure's ending.
Because assessing what is enough for living and the creditors' share differs from case to case, the debtor or creditor would do well to consult a lawyer specializing in bankruptcy cases.
Practical example
Ahmed is an individual trader for whom a liquidation procedure was ended and who was not discharged from a remaining debt. Ten months after the liquidation ended, a sum of money came to him. He must apply to the court for its distribution, attaching an expert's report showing what he keeps for his own and his dependents' decent living, and what is paid to each creditor according to his share and priority. If he does not, his creditors may apply to the court to claim their right to this money.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 21 of the Saudi Implementing Regulations of the Bankruptcy Law
Must a debtor notify his creditors if he starts a new job after liquidation?
Yes, if he is a natural person not discharged from a remaining debt and starts a commercial, professional or profit-making activity within 24 months of the ending of any of the liquidation procedures.
What should the debtor do if money comes to him after liquidation ends?
If this is within 24 months of the ending of liquidation and he has not been discharged from a remaining debt, he must apply to the court to distribute the money, with an expert's report.
What if the debtor does not apply to the court?
A creditor may apply to the court to claim his right to the money that came to the debtor, and the court may rule that the creditors are entitled to claim their debts before the competent court.
More articles on Opening and Ending a Bankruptcy Procedure
- Article 4
A request to open a bankruptcy procedure goes to the court with the specified documents, the trustee submits the small debtor's or competent authority's decision for judicial deposit, and the court may order the debtor to provide documents.
1- يُقدم طلب افتتاح إجراء الإفلاس إلى المحكمة مرافقاً له المعلومات والوثائق المحددة لذلك. 2- يقدم الأمين قرار المدين الصغير أو الجهة المختصة -من أجل الإيداع الق
- Article 5
After registration of a request to open any liquidation procedure, the court may appoint a trustee to replace the debtor in managing its activity, or seize the debtor's assets.
للمحكمة -من تلقاء نفسها أو بناء على طلب ذي مصلحة- أن تأمر, بعد قيد طلب افتتاح أي من إجراءات التصفية، بأي مما يأتي: أ - تعيين أمين مدرج في قائمة الأمناء يحل محل
- Article 18
This article of the Regulations requires that any document issued in the debtor's name state the type of procedure opened: the debtor does so in preventive settlement and financial restructuring, and the trustee or the Bankruptcy Committee in liquidation.
1- على المدين فور افتتاح أي من إجراءات التسوية الوقائية أو إعادة التنظيم المالي تضمين أي مستند يصدر باسمه نوع الإجراء المفتتح له، وعلى الأمين في أي من إجراءي إع
- Article 19
The expenses of a bankruptcy procedure are paid from the bankruptcy estate's assets, unless transgression or negligence is proved.
تدفع مصروفات إجراء الإفلاس من أصول التفليسة، ما لم يثبت تعدٍّ أو تفريط.
- Article 20
This article of the Regulations governs the request to end a bankruptcy procedure: attaching documents, prior notice and its content, objection before the court within 14 days, and the request to end on completion of the plan.
1 - يقدم طلب إنهاء إجراء الإفلاس مرافقة له المعلومات والوثائق المحددة لذلك. 2- على المدين أو الأمين -بحسب الإجراء- تبليغ الدائنين قبل تقديم طلب إنهاء إجراء الإف
- Article 56
This article allows the trustee, at the debtor's request, to ask the court to postpone ending the liquidation for an acceptable reason, such as bringing a claim against a third party.
للأمين -بناءً على طلب المدين- أن يتقدم إلى المحكمة بطلب تأجيل إنهاء إجراء التصفية لسبب مقبول بما في ذلك إقامة دعوى ضد الغير للحصول على تعويض أو استرداد أصل، على
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.