Article 125 of the Saudi Bankruptcy Law
المادة 125 من نظام الإفلاس · الفصل الخامس: إجراء التصفية: إنهاء الإجراء
The article governs removing an individual debtor's name from the bankruptcy register 30 days after the liquidation ends, and the continuation of its remaining debts unless the creditors release it.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يزال اسم المدين ذي الصفة الطبيعية من سجل الإفلاس بعد مضي (ثلاثين) يوماً من تاريخ صدور حكم المحكمة بإنهاء إجراء التصفية. ويترتب على ذلك تمكينه من ممارسة الأعمال التجارية أو المهنية أو الهادفة إلى تحقيق الربح.
2- لا تبرأ ذمة المدين ذي الصفة الطبيعية -بعد إزالة اسمه من سجل الإفلاس - من دين متبق في ذمته إلا بموجب إبراء خاص أو عام من الدائنين.
3- يعد المدين ذو الصفة الطبيعية الذي لم يبرأ من دين متبق في ذمته مفلساً فيما يتعلق بحقوق الدائنين المتبقية بذمته حتى بعد إزالة اسمه من سجل الإفلاس وذلك لمدة (أربعة وعشرين) شهراً من إنهاء إجراء التصفية وذلك دون أن يكون لأولئك الدائنين حق التقدم للمحكمة بطلب افتتاح أي من إجراءات الإفلاس خلال المدة المشار إليها، وتنظم اللائحة إجراءات مطالبة الدائنين بديونهم المتبقية في ذمة المدين في هذه المدة.
4- تحدد اللائحة أي إجراء آخر يلتزم الأمين بالقيام به بعد إنهاء إجراء التصفية.
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 125 explained in plain English
This article addresses the debtor who is a natural person (an individual) after the liquidation of its funds ends, and answers two questions: when can the debtor return to its activity, and what happens to its debts that have not been paid?
1- Removing the name from the bankruptcy register: The name is removed 30 days after the date the judgment ending the liquidation is issued, which enables the debtor to carry on commercial, professional or profit-seeking activities.
2- Remaining debts are not automatically forgiven: The debtor is not discharged from any debt remaining after its name is removed except by a specific or general release by the creditors.
3- The 24-month period: If the debtor is not released from a remaining debt, it is treated as bankrupt with respect to the creditors' remaining rights for 24 months from the end of the liquidation, even after its name is removed. During this period those creditors may not ask the court to open any bankruptcy procedure. The Implementing Regulations govern the procedures for claiming their remaining debts during this period, and the article itself does not set out those procedures.
4- The trustee's later obligations: The Implementing Regulations specify any other step the trustee must take after the liquidation ends.
This follows what Article 124 provides on the trustee's duty to file the ending judgment in the bankruptcy register and the commercial register. To assess a particular situation, consult a lawyer specializing in bankruptcy and commercial cases.
Practical example
Khalid is a trader in Qassim whose funds were liquidated by a court judgment, and 30 days later his name was removed from the bankruptcy register and he returned to trading. But part of a debt to a supplier remained and the supplier did not release him from it, so Khalid continued to be treated as bankrupt toward this debt for 24 months, and during that time the supplier could not ask to open a new bankruptcy procedure against him but claims its debt as the Implementing Regulations provide.
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 125 of the Saudi Bankruptcy Law
When is a bankrupt's name removed from the bankruptcy register?
The name of a debtor who is a natural person is removed 30 days after the date of the court's judgment ending the liquidation procedure.
Are the remaining debts forgiven after liquidation ends?
No. The debtor is not discharged from a remaining debt except by a specific or general release by the creditors.
Can a creditor ask for the debtor's bankruptcy again after liquidation?
Creditors with remaining rights may not ask to open any bankruptcy procedure within 24 months of the end of the liquidation, and the Implementing Regulations govern the procedures for claiming their debts in this period.
Can a bankrupt person return to trade?
Yes. Removing the name from the bankruptcy register enables the person to carry on commercial, professional or profit-seeking activities.
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.