Execution Law Draft expands debtor travel bans and amends debt settlement

Travel bans stand out as one of the most important proposed changes, as the draft allows the head of execution to impose a travel ban on the debtor at the creditor's request until the debt is paid off, without requiring the currently stipulated evidence regarding the instability of the debtor's residence in the Kingdom, their disposal or smuggling of assets, or the likelihood of their departure from the country with the intent to delay execution.

- Lifting travel bans in exchange for a guarantee

The draft allows for the lifting of a travel ban in exchange for a guarantee that ensures execution. It also increases the period after which an execution case is automatically dropped due to lack of follow-up from one year to two years, while deleting the provision that obligates the head of execution to cancel the travel ban when the case is dropped.

Regarding debt settlement, the draft introduces a minimum monthly installment of no less than 2% of the remaining debt, provided that payment begins 30 days after the first installment is deposited, unless the parties agree otherwise. It maintains the minimum for the first installment at 15% of the adjudged amount, a percentage that has been applied since the 2022 amendment.

In the event that the creditor rejects the settlement, the draft authorizes the head of execution, upon the creditor's request, to summon both parties to verify the debtor's ability to pay or to increase the settlement amount, and to hear the creditor's evidence before issuing the appropriate decision.

As for the imprisonment of the debtor, the draft maintains the maximum limit at 60 days per year for a single debt, and not exceeding 120 days regardless of the number of creditors, while continuing the prohibition on imprisoning a debtor who is unable to fulfill a contractual obligation, with the exception of obligations arising from a real estate lease contract or an employment contract.

- Obligating the debtor to use an electronic bracelet in several cases

The draft adds a case that permits requesting the imprisonment of the judgment debtor without proving their ability to pay or providing an opportunity to offer a settlement, if they refrain from executing a judgment requiring them to perform or refrain from an act, in addition to existing cases related to alimony, dowry, compensation for damages arising from a criminal offense, and failure to execute judgments for handing over a minor or visitation rights.

The draft also allows for obligating the debtor to use an electronic bracelet in cases where imprisonment is not permitted, as part of the precautionary measures that the head of execution can take, including travel bans, in accordance with a regulation issued for this purpose.

Regarding seizure procedures, the draft authorizes the head of execution to seize the debtor's assets immediately upon registration of the case if the executive instrument is a judicial judgment, based on the judgment creditor's request, while for other instruments, it requires proof that the debtor has begun smuggling their assets, provided that execution procedures are not completed before the notification period expires.

- Dealing with seized vehicles

The draft also allows for obligating the debtor in execution cases related to commercial debts to disclose their sources of income and assets owned by them in an amount sufficient to pay the debt, within 7 days of being notified of the order.

In dealing with seized vehicles, the draft authorizes the head of execution to allow the debtor to deposit the vehicle in a place of their choosing in exchange for a guarantee, until the referral decision is issued. It also grants the debtor the right to request to receive the vehicle while maintaining the seizure on it, if the creditor does not follow up on its sale after 30 days have passed from the day following the date of being notified of the seizure notice, provided that the debtor submits their request within 10 days of being notified of that.

The draft also allows the debtor to sell or mortgage the seized property within a period not exceeding 60 days from the day following the date of authorization, and for no less than its estimated value, while ensuring the deposit of the amount into the execution case account. It also allows interested parties to object to the valuation of the property before it is offered at auction.

Regarding auctions, the draft requires that bidding on movable property start at no less than 50% of its estimated value, and grants the successful bidder 3 days to deposit the price instead of immediate payment, while reducing the period stipulated for not hearing lawsuits to annul real estate sales due to formal errors from one year to 6 months, in accordance with the legal provisions governing that.

Regarding appeal procedures, the draft makes decisions issued in cases of execution of judicial judgments amounting to 50,000 dinars or more, and cases of execution of mortgage instruments, subject to appeal before the Court of Appeal, instead of the Court of First Instance in its appellate capacity, while keeping the appeal of the rest of the decisions included in the article before the latter court.

The draft allows for an appeal before the Court of Cassation with permission in specific cases, including the issuance of contradictory appellate decisions on the same issue, or if the value of the execution case reaches one million dinars or more if it involves a novel legal point of importance, within the specified conditions.

- Expansion of electronic execution

The draft also excludes executive instruments amounting to 50,000 dinars or more and mortgage instruments from the execution jurisdictions exercised by the Magistrate Judge in places where there is no Court of First Instance.

The draft expands the adoption of electronic execution, making it the standard for registering cases, paying fees, submitting requests, and conducting notifications and correspondence, while allowing paper procedures in cases of necessity, and regulating the effectiveness of electronic procedures and the calculation of objection and appeal periods for them.

The amendments also include expanding the territorial jurisdiction of some execution departments to include the debtor's domicile, raising the minimum rank of the judge who heads the execution department from the fourth to the third, and adding electronic publication to the procedures for announcing the sale of real estate.

The draft also includes amendments to the distribution of execution proceeds in cases related to mortgage instruments, and treating the creditor or the person who received excess amounts or without right as a debtor in the same execution case, for the purpose of recovering those amounts.

The draft includes 22 amending articles, which the Legislation and Opinion Bureau has put up for public consultation until November 3, 2026. Its provisions remain proposed and not yet in effect, with the law to take effect 90 days after its publication in the Official Gazette, should it complete its legislative stages and be approved.