The St. Lucia Parliament has officially approved new legislation designed to assist individuals in financial distress by enabling them to renegotiate their debt obligations with creditors. The Insolvency Act aims to create a structured legal framework that balances the interests of both debtors and creditors while tackling the growing issue of non-performing loans in financial institutions.
One of the key highlights of the Act is its provision for the protection of primary residences. Under this legislation, a portion of a debtor’s equity in their main home is exempt from creditor claims, allowing families to retain their homes even as they navigate financial challenges.
The new law offers several significant benefits to consumers. It facilitates debt forgiveness, enabling borrowers to negotiate for partial or complete relief from their debts. Additionally, the Act introduces an affordable, out-of-court restructuring process, making it easier for borrowers and creditors to reach mutually beneficial agreements.
The legislation also empowers borrowers with several protections, including the ability to halt creditor actions against them and pause the sale of assets while they work towards resolving their debts. These measures are designed to provide a safety net for individuals facing financial hardships.
Prime Minister Phillip J. Pierre emphasized that the Insolvency Act aligns with the financial policies of international institutions such as the World Bank, Caribbean Development Bank (CDB), and International Monetary Fund (IMF).
The development of this legislation began in 2014 and has undergone extensive revisions and consultations with various stakeholders. Prime Minister Pierre praised the National Competitiveness and Productivity Council (NCPC) for its leadership in drafting the Insolvency Legislation, marking a significant step forward in St. Lucia’s approach to financial management and consumer protection.
