CASTRIES, St. Lucia, CMC—Parliament has approved legislation providing a legal framework for individuals facing financial difficulties to restructure their debt obligations with creditors through structured proposals.
The government said the Insolvency Act also intends to strike a balance between debtors’ and creditors’ interests while addressing the issue of non-performing loans within financial institutions.
It said one of the bill’s most notable features is the protection it offers to primary residences. The bill exempts a certain portion of a debtor’s equity in their main home from creditors, ensuring that families can retain their homes while managing their debts.
This bill provides significant benefits to consumers, including debt forgiveness, by enabling borrowers to negotiate partial or complete debt forgiveness and affordable restructuring, which establishes a low-cost, out-of-court process for debt restructuring and allows borrowers and creditors to reach mutually beneficial agreements.
In addition, the legislation provides for creditor intervention, empowering borrowers to halt creditor actions against them, providing asset protection, and allowing borrowers to pause the sale of their assets while they work to resolve their debts.
Prime Minister Phillip J Pierre said the Insolvency Act will modern.
He said it also aligns the government’s financial policies with international financial institutions such as the World Bank, the Caribbean Development Bank (CDB), and the International Monetary Fund (IMF).
The government said that the development of this legislation began in 2014 and has since undergone numerous revisions and consultations with stakeholders. Pierre commends the National Competitiveness and Productivity Council (NCPC) for its leadership in drafting the Insolvency Legislation.
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