Ministry of Justice clarifies eligibility rules for debtors’ fund assistance
. . . as banks continue legal action against defaulters
Defaulting bank borrowers are not eligible for inclusion under Kuwait’s Debt Settlement Fund for Debtors, as the conditions set by the Ministry of Justice do not extend to individuals holding consumer or installment loans, even in cases where enforcement orders such as arrest or imprisonment have been issued.
The clarification comes amid increasing requests from borrowers facing legal action from banks, who have been seeking official debt statements in hopes of benefiting from the government-backed debt relief campaign. However, authorities stressed that such documentation does not make them eligible for assistance under the current framework.
Following consultations between banking institutions and relevant authorities at the Ministry of Justice, it was confirmed that bank loan defaulters fall outside the scope of the fund, as its provisions are designed for specific categories of debtors and do not include obligations owed to banks or similar financial institutions.
According to regulatory guidelines governing the initiative, eligibility is restricted to natural persons subject to active enforcement cases as of March 12, 2026, based on judicial rulings or payment orders.
Sources familiar with the matter have clarified that certain categories, including bank debts, investment company obligations, telecom debts, criminal fines, and settlement agreements, are explicitly excluded from assistance.
Sources further confirmed that banks will continue legal proceedings against defaulting clients in order to protect their financial rights, including enforcement actions such as asset seizure and litigation, unless the debtor reaches a formal settlement or repayment arrangement supported by legally valid guarantees.
The process typically escalates from amicable collection to court rulings and execution stages if payment obligations remain unfulfilled. Authorities emphasized that requests for debt acknowledgment certificates will not halt ongoing enforcement procedures.
Under the priority system set by the Ministry of Justice, assistance is directed first to Kuwaiti citizens, followed by other specified categories, with additional prioritization based on case type, debt value, and filing date. A specialized committee reviews applications to determine eligibility and allocate support accordingly.
Officials also noted that donations may be accepted to help settle debts fully or partially, provided the debtor has not previously benefited from assistance in the same case, with a maximum donation cap of 10,000 Kuwaiti dinars per beneficiary.
Those who do not meet the criteria will be automatically excluded, as applications are reviewed through an electronic system managed by the committee, ensuring transparent processing and efficient allocation of aid to eligible cases.
