Article 102 of the Saudi Bankruptcy Law
المادة 102 من نظام الإفلاس · الفصل الخامس: إجراء التصفية: إدارة أمين التصفية لنشاط المدين
Opening the liquidation leads to the start of liquidating the bankruptcy estate assets, carried out by the trustee, except what the court approves an individual debtor keeping for the living of the debtor and dependents.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يترتب على افتتاح إجراء التصفية البدء في تصفية أصول التفليسة.
2- يتولى الأمين تصفية أصول التفليسة عدا ما وافقت المحكمة على احتفاظ المدين ذي الصفة الطبيعية به لتوفير ما يكفي له ولمن يعول لمعيشة بالمعروف -بناء على تقدير الأمين- ويلتزم المدين بمساعدة الأمين على تقويم الأصول لتقدير ما يحتفظ به منها.
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 102 explained in plain English
This article sets out the direct effect of opening the liquidation procedure, and what is excluded from liquidation in favor of the debtor if the debtor is a natural person.
The rule: Opening the liquidation procedure leads to the start of liquidating the bankruptcy estate assets, and the trustee carries out this liquidation.
The exception: The trustee does not liquidate what the court has approved a debtor who is a natural person (that is, an individual, not a company) keeping, so as to provide enough for the debtor and those the debtor supports to live in a reasonable manner. This is determined on the trustee's assessment, followed by the court's approval.
The debtor's duty: The debtor must help the trustee in valuing the assets, to estimate what part of them is retained.
Note that the article does not specify an amount or particular type of property that the debtor retains, but ties it to the standard of "sufficiency for a reasonable living", the trustee's assessment and the court's approval. This exception is also specific to a natural person, so it does not cover a debtor with legal personality such as a company.
It is followed by Article 103, under which the trustee sells the bankruptcy estate assets at the same time as verifying claims. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
Liquidation has been opened against a sole trader in Madinah, who supports a wife and children. The trustee assesses what is enough for him and his family to live reasonably from his assets, and the trader helps him in valuing them. If the court approves, the trader keeps that amount and the trustee liquidates the remaining assets.
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 102 of the Saudi Bankruptcy Law
Can a bankrupt person keep any of their money?
Yes, if a natural person, who keeps what the court approves to provide enough for the person and dependents to live reasonably, on the trustee's assessment.
Does this exception cover companies?
No. The text is specific to a debtor who is a natural person.
What is the debtor's role in determining what it keeps?
The debtor must help the trustee in valuing the assets to estimate what part of them it keeps.
More articles on Liquidation of the Debtor's Assets
- Article 7
Article 7 bars the liquidation of any person under another law unless its assets cover all its debts and it is not defaulting, and makes management members jointly liable if this is violated.
1- مع مراعاة ما ورد في المادة (الرابعة) من النظام، لا يصفى أي شخص بموجب نظام آخر إلا إذا كانت أصوله تكفي لسداد جميع ديونه وكان غير متعثر. 2- إذا تم حل المدين وت
- Article 69
The debtor continues to manage its business during financial reorganization under the trustee's supervision, and at the trustee's request the court may remove its control in cases of negligence, mismanagement or criminal acts.
1- دون إخلال بصلاحيات ومهمات الأمين، يستمر المدين في إدارة أعماله ونشاطه خلال فترة إجراء إعادة التنظيم المالي تحت إشراف الأمين. 2- إذا ارتكب المدين أو أحد المسؤ
- Article 90
The court opens liquidation or administrative liquidation after financial restructuring ends if the debtor is distressed or bankrupt, the procedure's conditions are met, and the ending was for specified grounds.
تقضي المحكمة -من تلقاء نفسها أو بناء على طلب من ذي مصلحة- بافتتاح إجراء التصفية أو التصفية الإدارية إذا تحققت الشروط الآتية: أ - أن يكون المدين متعثراً أو مفلسا
- Article 92
The article allows the debtor, a creditor or the competent authority to ask the court to open the liquidation procedure if the debtor is distressed or bankrupt.
دون الإخلال بأحكام الأنظمة ذات العلاقة، للمدين أو الدائن أو الجهة المختصة التقدم إلى المحكمة بطلب افتتاح إجراء التصفية للمدين إذا كان المدين متعثراً أو مفلساً.
- Article 93
The article requires that a liquidation request be accompanied by the information and documents the Implementing Regulations specify to be registered, and sets special conditions where one or more creditors file it.
1- يشترط لقيد طلب افتتاح إجراء التصفية لدى المحكمة أن يقدم الطلب مرافقاً له المعلومات والوثائق ذات العلاقة، وفقاً لما تحدده اللائحة. 2- لا يقيد طلب دائن أو أكثر
- Article 94
A creditor's request to open liquidation is not registered if the debtor disputed the debt before the request, and filing it despite proof of the dispute is an abuse of the procedure.
لا يقيد طلب الدائن بافتتاح إجراء التصفية إذا كان المدين قد نازع الدائن في الدين قبل تقدم الدائن بالطلب. ويعد طلب الدائن افتتاح الإجراء مع وجود ما يثبت منازعة ال
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.