which includes conditions and requirements for accepting these requests. According to this circular, the path of installment requests has been modified as of November 25, 2024, to comply with the following conditions:

First: Conditions for Accepting the Installment Request

If you wish to submit a debt installment request through an execution file, you must meet the following conditions and requirements in the installment request to increase the chances of its acceptance by the creditor and the execution judge, as applicable:

1. Payment of an initial installment of 20% of the outstanding amount before submitting the installment request. The advance payment is not considered a final acceptance of the installment but rather proof of good faith and seriousness of the debtor in adhering to the installment plan and paying the amount executed for.
2. Proof of monthly income, including a salary certificate or income statement from any other source.
3. Submission of a detailed bank statement for the last 6 months.
4. Proof of ownership, such as documents proving any owned assets like real estate, vehicles, or stocks.
5. Submission of a declaration from the applicant explaining their general financial situation and confirming the accuracy of the provided data.

Second: Assigning Installment Requests to the Settlement Division

After the installment request is submitted by the debtor, the request is referred to the Settlement Division to study the request, which in turn verifies the following:

1. Verification of the authenticity of the submitted documents.
2. Study of the applicant’s ability to adhere to the installment plan based on monthly income, other financial obligations, and owned assets.
3. Preparation of a detailed financial report that includes the payment plan based on the applicant’s financial situation.
4. Presentation of the report to the competent judge to decide what he deems appropriate.

Therefore, the circular issued regarding installment requests in execution files at Dubai Courts clarified the path of installment requests in terms of conditions, requirements, and procedures for processing the request, which can be summarized as follows:

1. The installment request is assigned to the Settlement Division to study the request.
2. The division studies the request and negotiates with the parties to reach a settlement.
3. If a settlement is not possible, the conditions for accepting the installment are verified, and the request is referred to the competent judge after the study.

What happens if the debtor stops paying the installments stipulated in the execution file?

The General Assembly of the Dubai Court of Cassation, in its decision issued on May 15, 2024, No. 9 of 2024, states that the debtor cannot be imprisoned unless the creditor proves his solvency or that he has hidden or transferred his assets, or it is proven that he owns assets that can be seized and executed to cover the debt.

Cases of Debtor Imprisonment in Execution Files at Dubai Courts

However, the debtor can be imprisoned without the need to prove his solvency in the following cases:

1. Stopping the payment of installments decided by the execution judge, or if he was a guarantor of payment, or if the executive document is based on an agreement, settlement record, notarized acknowledgment, reverse execution, or proof of his income or solvency.
2. Refusal to submit the documents requested by the execution judge to determine his solvency or insolvency.
3. In all cases, a decision to arrest and bring the debtor cannot be issued except in cases where imprisonment is permissible, and only after determining his solvency or insolvency through a brief investigation or any other means deemed appropriate by the execution judge.

What are the penalties for not adhering to the installment plan?

In the event that the debtor does not adhere to the payment plan in the execution file, the debtor may face multiple legal penalties, depending on the debtor’s financial circumstances and whether the delay in payment is due to genuine insolvency or procrastination. Here are some key points about potential penalties:

First: Imprisonment:

• If the creditor proves that the debtor is capable of payment but is procrastinating, the judge can issue a ruling to imprison the debtor for a period not exceeding one month, renewable.
• If the debtor is a resident and there is no fear of his escape, the imprisonment period should not exceed 6 consecutive months. The imprisonment period can be renewed after 90 days, provided that the total imprisonment period does not exceed 36 months, regardless of the debt amount or the number of creditors.

Second: Proof of Insolvency: If the debtor is unable to pay due to genuine insolvency, he can avoid imprisonment by proving his financial condition. In this case, the burden of proof lies with the creditor to prove the debtor’s solvency and that the delay in payment is due to procrastination and not financial incapacity.

Can penalties be avoided?

Yes, penalties can be avoided in case of non-payment by following some preventive measures. Here are some tips that may help you avoid penalties:

1. Negotiation with the Creditor:

• Try to negotiate with the creditor to reach an amicable settlement. The creditor may be willing to accept a flexible payment plan or extend the payment period.

1. Proof of Insolvency:

• If you are unable to pay due to genuine insolvency, you can submit a request to prove your financial condition. In this case, you must provide documents proving your inability to pay, such as bank statements, income certificates, and any other documents that support your financial condition.

1. Adherence to the Payment Plan:

• If a payment plan is agreed upon with the creditor or the court, make sure to adhere to it precisely. Failure to adhere to the payment plan may result in penalties.

1. Legal Consultation:

• It is beneficial to consult a lawyer specializing in financial and execution cases to obtain legal advice tailored to your situation. The lawyer can help you submit the necessary documents and negotiate with creditors.

1. Continuous Communication:

• Maintain continuous communication with creditors and the court to inform them of your financial situation and any changes that may affect your ability to pay. Transparency and good communication can help avoid penalties.

By following these measures, you can reduce the risk of facing legal penalties in case of non-payment.