Commercial Law
Bankruptcy Petitions and the Court’s Declaration
This summary explains who may bring a bankruptcy petition and the procedural steps before the Court of First Instance under the amended Jordanian Commercial Law, and describes how a court declaration of bankruptcy affects the debtor’s asset management and creditors’ rights. It also addresses how the cessation-of-payments date is set, and the requirements for affixing, publishing and executing a bankruptcy judgment.
Updated: 7 February 2023
Prepared and reviewed by: Ashraf Al-Khawaja
Competent Court and Who May File
The Court of First Instance has exclusive subject-matter jurisdiction over bankruptcy petitions when the debtor’s principal place of business lies in its district; once statutory conditions are met the court must pronounce bankruptcy. A petition may be filed by the debtor, one or more creditors, or the Public Prosecution when investigations reveal insolvency or related criminal conduct. A trader who files as insolvent must submit the petition and a detailed statement of assets and liabilities within twenty days of cessation of payments, otherwise criminal liability for culpable bankruptcy may arise; creditors may petition regardless of the debt’s amount.
The Declaration of Bankruptcy: Contents and Legal Effects
A bankruptcy declaration issued by the Court of First Instance records the insolvency status, fixes the cessation-of-payments date, and appoints a bankruptcy trustee and a delegated judge, together with provisional measures to protect creditors (e.g. sealing assets or detaining the debtor). The judgment has a constitutive and dispositive character: it creates the collective liquidation regime and typically removes the debtor’s management powers. The court has discretion to set the cessation date but cannot retroactively place it more than eighteen months before the judgment; that date may be challenged or amended under the statutory procedure.
Affixing, Publication, Res Judicata and Execution
The judgment and summaries of any alteration to the cessation date must be posted in the court foyer, at relevant stock exchange centers, on the debtor’s commercial premises, published in a daily newspaper in the relevant localities, recorded in the commercial register and notified to the Public Prosecution. The bankruptcy declaration carries general res judicata effects upon issuance and is executable immediately and urgently (e.g. freezing the debtor’s management powers, taking inventory); appeals do not automatically suspend enforcement unless the law provides otherwise. Although publication duties exist, the statute does not prescribe a specific sanction for failure or delay in publishing, and legal effects attach upon issuance.
Powers of the Public Prosecution and the Court Acting Sua Sponte
The Public Prosecution may request a bankruptcy declaration when investigations indicate the debtor has ceased payments or when criminal indicators (e.g. embezzlement, destruction of books) are present. The court may also declare bankruptcy sua sponte to protect creditors and the public interest, for example after rejecting a composition proposal or if the court finds the debtor unable to pay. Nevertheless, these powers are exercised within statutory procedural limits: the court cannot dispense with required procedural formalities nor exceed the safeguards the law prescribes to prevent misuse.
Legal notice
Disclaimer: This content is general educational information only. The original source is linked on the summary page; you should verify the applicable statutory texts, subsequent amendments and procedural deadlines, and consult a licensed lawyer for legal advice tailored to your specific situation.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.