New Insolvency Act Empowers Debtors to Negotiate with Creditors

Office of the Prime Minister – On September 16, 2024, Prime Minister Hon. Philip J. Pierre tabled the Insolvency Bill in Parliament. The proposed legislation provides a legal framework for individuals facing financial difficulties to renegotiate their debt obligations with creditors through structured proposals. This bill aims to strike a balance between the interests of debtors and creditors while addressing the issue of non-performing loans within financial institutions.

One of the most notable features of the bill is the protection it offers to primary residences. It 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:

1. Debt Forgiveness: Enabling borrowers to negotiate partial or complete debt forgiveness.
2. Affordable Restructuring: Establishing a low-cost, out-of-court process for debt restructuring, allowing borrowers and creditors to reach mutually beneficial agreements.
3. Creditor Intervention: Empowering borrowers to halt creditor actions against them.
4. Asset Protection: Allowing borrowers to pause the sale of their assets while they work to resolve their debts.

Prime Minister Pierre highlighted that the Insolvency Act will modernize the credit sector in Saint Lucia, redefining the relationship between creditors and debtors. 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 development of this legislation began in 2014 and has since undergone numerous revisions and consultations with stakeholders. Nearly a decade later, Prime Minister Hon. Philip J. Pierre has successfully guided the Insolvency Bill through Parliament.

 The Prime Minister also commended the National Competitiveness and Productivity Council (NCPC) for its leadership in drafting the Insolvency Legislation, which promises to bring transformative change to Saint Lucia’s financial landscape.

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A copy of the new act can be accessed here.