CASTRIES, St Lucia (CMC) – Parliament has given the green light to legislation providing a legal framework for individuals facing financial difficulties to renegotiate their debt obligations with creditors through structured proposals.

The government said the Insolvency Act is also intended to strike a balance between the interests of debtors and creditors while addressing the issue of non-performing loans within financial institutions.

It said one of the most notable features of the bill is the protection it offers to primary residences and 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 debt forgiveness by enabling borrowers to negotiate partial or complete debt forgiveness as well as affordable restructuring that allows for establishing a low-cost, out-of-court process for debt restructuring, allowing borrowers and creditors to reach mutually beneficial agreements.

In addition, the legislation provides for creditor intervention, empowering borrowers to halt creditor actions against them as well as asset protectio and allowing borrowers to pause the sale of their assets while they work to resolve their debts.

Prime Minister Phillip J Pierre said the Insolvency Act 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 government said that the development of this legislation began in 2014 and has since undergone numerous revisions and consultations with stakeholders with Pierre commending the National Competitiveness and Productivity Council (NCPC) for its leadership in drafting the Insolvency Legislation.