Article 145 of the Saudi Bankruptcy Law
المادة 145 من نظام الإفلاس · الفصل السابع: إجراء إعادة التنظيم المالي لصغار المدينين: الإجراء
The article regulates two ways of opening financial reorganization for small debtors: a decision by the debtor or competent authority after agreeing with a trustee, effective only on judicial filing, or a creditor's request to the court.
Official text (Arabic)
This article has not been amended since the law was issued.
1- للمدين الصغير أو الجهة المختصة إصدار قرار بافتتاح إجراء إعادة التنظيم المالي لصغار المدينين بعد الاتفاق مع أحد المدرجين بقائمة أمناء الإفلاس لتولي مهمات الأمين، ويقدم المدين الصغير أو الجهة المختصة إلى الأمين القرار وجميع المعلومات والوثائق لغرض الإيداع القضائي، وتحدد اللائحة أحكام ذلك.
2- لا يسري قرار افتتاح الإجراء الصادر من قبل المدين الصغير أو الجهة المختصة ولا يرتب أي أثر إلا بعد الإيداع القضائي.
3- للدائن تقديم طلب افتتاح الإجراء إلى المحكمة، ويقيد الطلب لديها بعد تقديمه مرافقاً له المعلومات والوثائق ذات العلاقة، وفقاً لما تحدده اللائحة.
4- إذا تقدم الدائن بطلب افتتاح الإجراء، فعلى المحكمة تبليغ المدين الصغير به خلال مدة لا تزيد على (خمسة) أيام من تاريخ تقديمه. وللمدين الصغير الاعتراض على الطلب أثناء الجلسة إذا كانت شروط افتتاح الإجراء غير منطبقة أو كان الدين محل نزاع أو كان الدائن يسعى إلى إساءة استغلال الإجراء. وللمحكمة أن تأمر المدين الصغير بتقديم المعلومات والوثائق التي تحددها اللائحة.
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 145 explained in plain English
This article sets out the ways of opening the financial reorganization procedure for small debtors, and distinguishes between the debtor or the competent authority on one hand, and the creditor on the other.
1- Decision of the small debtor or the competent authority:
- The decision is issued after agreeing with one of those on the bankruptcy trustees list to take on the trustee's duties.
- The decision and all information and documents are submitted to the trustee for the purpose of judicial filing, and the Implementing Regulations specify the provisions on this.
- The decision does not take effect and has no effect until after judicial filing.
2- Creditor's request: the creditor submits the opening request to the court, and it is registered with the court after submission, accompanied by the relevant information and documents in accordance with the Implementing Regulations.
3- Notifying the debtor and its objection: the court must notify the small debtor of the creditor's request within 5 days at most of its submission. The debtor may object during the hearing in three cases:
- if the conditions for opening the procedure do not apply.
- if the debt is disputed.
- if the creditor is seeking to abuse the procedure.
The court may order the debtor to submit the information and documents specified by the Implementing Regulations.
Article 144 requires that the small debtor be bankrupt, distressed, or likely to suffer financial disturbances that raise fear of its distress. Article 146 provides that the trustee agreed with is the one who carries out the judicial filing, and that the court keeps a register of the information and documents submitted. For a particular situation, it is advisable to consult a lawyer specialized in bankruptcy and commercial matters.
Practical example
A supplier in Riyadh with overdue amounts owed by a small establishment submitted to the court a request to open financial reorganization for small debtors for it. The court notified the establishment within 5 days, and at the hearing the establishment objected that the debt was disputed between it and the supplier over the quality of the goods.
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 145 of the Saudi Bankruptcy Law
How does a small debtor open financial reorganization itself?
It issues a decision to open after agreeing with one of those on the bankruptcy trustees list, and submits to the trustee the decision, information and documents for judicial filing. The decision takes effect only after this filing.
Can a creditor request financial reorganization of a small debtor?
Yes. The creditor submits the opening request to the court, accompanied by the relevant information and documents in accordance with the Implementing Regulations.
When may the small debtor object to a creditor's request?
During the hearing, if the conditions for opening do not apply, the debt is disputed, or the creditor is seeking to abuse the procedure.
More articles on Small Debtor Bankruptcy Procedures
- Article 102
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.
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
- Article 127
The article states that the aim of the protective settlement for small debtors is to let a small debtor agree with its creditors on settling its debts through simple, low-cost procedures while it keeps managing its business.
يهدف إجراء التسوية الوقائية لصغار المدينين إلى تمكين المدين الصغير من التوصل إلى اتفاق مع دائنيه لتسوية ديونه خلال فترة معقولة عبر إجراءات يسيرة بتكلفة منخفضة و
- Article 128
The article lets a small debtor choose the ordinary protective settlement, and bars it from opening a small debtors' settlement if it was subject to it or to a protective settlement in the preceding 12 months.
1- للمدين الصغير طلب افتتاح إجراء التسوية الوقائية بدلاً من افتتاح إجراء التسوية الوقائية لصغار المدينين. 2- لا يجوز للمدين افتتاح إجراء التسوية الوقائية لصغار
- Article 129
The article allows a small debtor that is distressed, bankrupt or expecting distress to issue a decision opening the small debtors' protective settlement and file it with its proposal in the bankruptcy register.
1- للمدين الصغير إذا كان يتوقع مواجهة اضطرابات مالية يخشى معها تعثره أو كان متعثراً أو مفلساً، أن يصدر قراراً بافتتاح إجراء التسوية الوقائية لصغار المدينين وفق
- Article 130
The article requires a small debtor to call the owners to vote on the proposal if it affects their rights, at least 21 days before the voting date and before the creditors vote.
إذا تضمن المقترح ما يؤثر في حقوق الملاك، فعلى المدين الصغير دعوتهم إلى التصويت على المقترح قبل حلول موعد التصويت بـ(واحد وعشرين) يوماً على الأقل وفقاً لما تنص ع
- Article 131
The article lets a small debtor ask the court to suspend claims for no more than 90 days, and explains when that period ends.
1- للمدين الصغير أن يطلب من المحكمة -خلال المدة من افتتاح إجراء التسوية الوقائية لصغار المدينين إلى موافقة الدائنين على المقترح- تعليق المطالبات لمدة لا تزيد عل
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.