«Abu Dhabi Civil Authority» rejected the application for «insolvency of a debtor» and obligated the plaintiff to pay the expenses

Retirement is not a reason to declare a home loan insolvent

The court affirmed that the decrease in monthly salary was not a reason for declaring insolvency. Archival

The Abu Dhabi Family Court and Civil and Administrative Cases rejected a debtor's insolvency application submitted by a man who obtained a housing loan and before the end of the installment payment period suffered an accident that led to his retirement from work, and the court pointed out that retirement is not a reason for declaring insolvency.

In the details, a man filed a lawsuit requesting a ruling on the issuance of the decision «insolvency of the debtor» and the subsequent procedures in the face of all creditors, pointing out that he obtained a housing loan from a local bank, with a financial value of three million and 300 thousand dirhams, where he began to pay the financial fees resulting from the loan and monthly installments, periodically and on time without delay, until a decision was issued by his employer stating that it was decided to refer him, for retirement due to an accident, which led to to receiving a pension less than the salary he was receiving during the period of employment.

The plaintiff explained in his request to the court that he committed to pay the monthly installments, from his monthly salary, and that the total value of the amounts of money owed to him reached 512 thousand dirhams, and since he is unable to pay, he asks the court to rule on his requests.

For its part, the court clarified in the reasons for its judgment that the debtor may submit to the court an application without litigating anyone to settle his financial obligations, as the law defines insolvency as facing current or expected financial difficulties that make the debtor unable to settle his debts, and the debtor submits an application to commence his insolvency proceedings and liquidate his funds in the event that he stops paying any of his debts on their due dates for a period of more than 65 working days.

The court pointed out that the plaintiff was unable to prove that the payment of the debt is the subject of the insolvency lawsuit, and therefore his claim is unsubstantiated, and does not affect the indebtedness he maintains due to the declarations, and his inability to pay the amounts of money owed as a result of the reasons mentioned in his request for a decrease in his monthly salary after he was referred to retirement, stressing that these reasons are not considered in themselves a reason that requires declaring his insolvency, especially since the documents indicate the existence of sources of income for him. It is the pension, and the court ruled to reject the application and obligated the applicant to pay the expenses.

The remaining amount of the loan amounted to AED 512,<> that the plaintiff defaulted on.