Part Five of the Commercial Transactions Law sets out provisions dealing with the bankruptcy procedure for traders who cease to pay their debts. This article will take a look at the bankruptcy provisions of the Commercial Transactions Law.

Definition of Bankruptcy  

Section 1 of Article 645 of the Commercial Transactions Law provides:

“Subject to the provisions of preventive composition, any trader who ceases to pay his commercial debts when due because of financial distress and credit issues may be declared bankrupt.”  

Accordingly, bankruptcy can be defined as a situation where a trader ceases to pay his commercial debts when due because of financial distress. 

“Trader” means an individual or an entity (such as a commercial company).