Insolvency Law at Jamaica
Jamaica's insolvency framework is governed by the Insolvency Act, 2014, which modernised the country's approach to both personal and corporate insolvency. The Act introduced a rehabilitative focus, aiming to support viable businesses in distress while ensuring fair treatment of creditors. (Few take shelter under new insolvency law | Business | Jamaica Gleaner)
⚖️ Key Features of the Insolvency Act, 2014
1. Rehabilitation-Oriented Procedures
Proposal Regime: Insolvent individuals or companies can file a Notice of Intention (NOI) to make a proposal within 30 days, seeking to restructure debts and avoid bankruptcy. A licensed trustee assists in preparing and negotiating the proposal with creditors. If creditors approve, the debtor can continue operations under the agreed terms . (Wilfred Baghaloo and Marlon Murdock |The Insolvency Act: An opportunity for the turnaround of failing companies | In Focus | Jamaica Gleaner, Wilfred Baghaloo and Marlon Murdock | The Insolvency Act: A saving grace for companies in distress | In Focus | Jamaica Gleaner)
Stay of Proceedings: Upon filing the NOI, an automatic stay halts creditor actions, including legal proceedings and asset seizures, providing the debtor with breathing room to negotiate a viable plan .
2. Liquidation and Bankruptcy
Involuntary Liquidation: Creditors can petition the court for a receiving order if the debtor owes at least JMD 300,000 and has committed an act of bankruptcy within six months. A trustee is appointed to manage the liquidation process . (Insolvency 2023 - Jamaica | Global Practice Guides | Chambers and Partners)
Government Trustee: If a debtor cannot find a licensed trustee, the Office of the Supervisor of Insolvency (OSI) may appoint a government trustee to administer the bankruptcy estate . (Insolvency Reports - Jamaica Business Gateway)
3. Cross-Border Insolvency
Jamaica is a signatory to the UNCITRAL Model Law on Cross-Border Insolvency, allowing foreign insolvency proceedings to be recognised and enforced locally. This facilitates international cooperation in cases involving debtors with assets or operations in multiple jurisdictions . (Cross-border insolvency: registration of foreign bankruptcy proceedings in Jamaica - Jamaica Observer)
4. Regulatory Oversight
The OSI, established under the Act, oversees the insolvency process, licenses trustees, and ensures compliance with ethical standards. The OSI also provides financial counselling for first-time bankrupts and maintains a registry of insolvency records . (Wilfred Baghaloo and Marlon Murdock | The Insolvency Act: A saving grace for companies in distress | In Focus | Jamaica Gleaner, Insolvency Reports - Jamaica Business Gateway)
📌 Practical Considerations
Thresholds: To initiate proceedings, a debtor must owe at least JMD 300,000 to creditors. (Insolvency 2023 - Jamaica | Global Practice Guides | Chambers and Partners)
Timeline: The proposal process begins with the filing of the NOI and must culminate in a formal proposal within 30 days, extendable by the OSI if necessary . (Wilfred Baghaloo and Marlon Murdock | The Insolvency Act: A saving grace for companies in distress | In Focus | Jamaica Gleaner)
Trustee Role: A licensed trustee plays a central role in both rehabilitation and liquidation processes, guiding debtors through negotiations and ensuring fair treatment of creditors .
Jamaica's insolvency regime aims to balance the interests of debtors and creditors, promoting business recovery and economic stability. For detailed guidance or to initiate proceedings, individuals and businesses can contact the Office of the Supervisor of Insolvency at info.osi@micaf.gov.jm or visit their official website. (Office of the Supervisor of Insolvency | MOAF)
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