CASTRIES, St. Lucia (CMC) – The Parliament of St. Lucia has passed groundbreaking legislation designed to assist individuals struggling with financial difficulties. The new Insolvency Act establishes a legal framework for borrowers to renegotiate their debt obligations with creditors through structured proposals, aiming to address the growing issue of non-performing loans within financial institutions.
A key feature of the Insolvency Act is the protection it offers to primary residences. This provision ensures that a portion of a debtor’s equity in their main home is exempt from creditors, allowing families to retain their homes while managing their debts.
The legislation brings substantial benefits to consumers, including the possibility of debt forgiveness. Borrowers will now have the opportunity to negotiate partial or complete debt forgiveness, facilitating affordable restructuring processes. This allows for a low-cost, out-of-court approach to debt restructuring, enabling both borrowers and creditors to reach mutually beneficial agreements.
Moreover, the Insolvency Act empowers borrowers by allowing them to pause creditor actions against them. This includes asset protection measures that can halt the sale of their assets while they work towards resolving their debts.
Prime Minister Phillip J. Pierre emphasized that the Insolvency Act aligns the government’s financial policies with international financial institutions, including the World Bank, Caribbean Development Bank (CDB), and the International Monetary Fund (IMF).
The development of this legislation dates back to 2014 and has undergone extensive revisions and consultations with various stakeholders. Prime Minister Pierre commended the National Competitiveness and Productivity Council (NCPC) for its leadership in drafting the Insolvency Legislation.
With the passage of the Insolvency Act, St. Lucia takes a significant step toward providing support for individuals in financial distress, promoting stability and resilience within the economy.
