Bankruptcy is a legal system concern the process of merchantman debtor who stops paying for his own financial obligation in time .
According this definition Bankruptcy is a legal provision applied upon merchantman by the meaning which set on commercial law . so that article 13 of the same law state ( Any person who has engaged in his name in commercial transaction and is a holder of due diligence and took such transactions as trade to be a trader also considered accompanies trade , even if engaged in non-commercial ) .
The Kuwait legislator has regulated bankruptcy in trade law No .68 of 1980 , clarifying the concept of bankruptcy , the court dealing with its cases ,bankruptcy proceeding , bankruptcy protection , restricting and the possibility of obtaining loans .
The legislator gives the general court the jurisdiction of dealing with bankruptcy cases .He states in trade law article 563 ( the general court of district in which the commercial debtor is located . concerns of bankruptcy if it does not have a commercial place in which the competent court has suspended payment .In the case of any case arising out of bankruptcy , and the case shall be deemed to arise out of bankruptcy in particular ).
The fast track nature of the law provides for bankruptcy proceeding to be considered expeditiously and judgments issued shall be expeditiously enforceable without bail unless otherwise provided and the date of appeal shall be fifteen days.
Article (560) describes the bankruptcy case and the following procedures ( the merchant may request bankruptcy if his financial business is disturbed and he has not paid his dept.) 2-The application shall be submitted to the management of the courts full book . 1- The main commercial books . 2- A copy of the last balance sheet and profit loss account . 3- A statement of the personal expenses for the three years preceding the filing of the bankruptcy month .4- A detailed statement of the properties and movables owned by him and their approximate value at the date of payment . statement of creditors and debtors and the amount of their rights or their debts and the collateral there of . 6-Astatement of patents issued against the trader during the two years preceding the filing of the bankruptcy mont .
3- The document must be dated and signed by the merchant . if some of them can not be submitted or completed , the report must include the reasons for this and the management of the book shall release a copy of the receipt of these documents .
However , the legislator has allowed the debtor to dispose of the insolvency judgment as provided in article 572 ( before the bankruptcy ruling is valid if the debtor is able to discharge , the court must cancel the bankruptcy judgment ) .
In the binding contracts of the two parties to which the bankrupt is a party , the judgment shall not be annulled by the month of bankruptcy unless it is based on personal considerations .
If the director of bankruptcy does not execute the contract , the other party may request the annulment and participate in bankruptcy by the indemnity resulting from the annulment and any decision taken by the director of bankruptcy concerning the contract shall be submitted to the judge to authorize it . The other party may appoint the director of bankruptcy to clarity his position on the contract .