What Is Liquidation for Small Debtors?
In brief: This simplified procedure sells a small debtor's bankruptcy assets and distributes the proceeds to creditors under a trustee's management. It applies where total debts do not exceed SAR 2 million.
What is Liquidation for Small Debtors?
Liquidation for small debtors is a simplified, efficient and lower-cost procedure for selling bankruptcy assets and distributing the proceeds under a trustee's management.
What is the purpose of this procedure?
To complete the sale and distribution of a small debtor's assets within a reasonable period using a simplified process.
Who may use this procedure and when?
The small debtor or competent authority may issue the commencement decision after agreement with a listed trustee. A creditor may also apply subject to the statutory requirements.
When the procedure may be used:
- When the debtor's total debts do not exceed SAR 2 million.
- For a creditor application, when the debt is at least SAR 50,000 and the other statutory conditions are met.
What are the main stages?
Confirm the threshold
Confirm that total debts do not exceed SAR 2 million.
Agree with a trustee
Agree with a person listed as a bankruptcy trustee before the commencement decision.
Commence the procedure
The small debtor or competent authority follows the approved commencement process.
Sell and distribute
The trustee sells the assets and distributes proceeds to creditors.
Frequently asked questions about Liquidation for Small Debtors
A debtor whose total debts at commencement do not exceed SAR 2 million.
The minimum debt enabling a creditor to seek liquidation is SAR 50,000.
A listed bankruptcy trustee manages the sale of assets and distribution of proceeds.
Source: Saudi Bankruptcy Law, its Implementing Regulations and Bankruptcy Commission guidance — Bankruptcy Commission. This content is for general information and does not constitute legal advice.