The Bill was first presented in Parliament on March 17, 2026, and was passed following a parliamentary debate held on May 6, 2026.
The new legislation introduces a comprehensive framework governing both corporate and personal insolvency, while amending several existing laws, including the Companies Act, Inland Revenue Act, and Mediation Boards Act. It also repeals the long-standing Insolvency Ordinance.
Among its key provisions are measures relating to personal insolvency, including debt protection mechanisms, temporary moratoria, and debt restructuring procedures. The Act also seeks to safeguard a debtor’s reasonable income and essential assets during insolvency proceedings.
For businesses, the legislation establishes procedures covering corporate rescue, rehabilitation, receivership, and cross-border insolvency matters, with the aim of improving certainty, transparency, and confidence within the credit market.
The Act is expected to provide financially distressed but viable companies with opportunities for recovery while offering honest individual debtors a structured path towards financial rehabilitation and a fresh start.
