Struggling small businesses urged to use gov’t insolvency regime

Supervisor of Insolvency, Fayola Evans Roberts, is encouraging small business owners struggling to meet their financial obligations to take advantage of the options available under the Government’s insolvency regime, which is designed to provide support and relief.

Speaking during a hybrid micro, small and Medium-sized Enterprise (MSME) webinar on Monday, June 29, at the Small Business Association of Jamaica (SBAJ) in Kingston, Evans Roberts explained that insolvency is a legal framework designed to assist individuals and businesses in managing financial distress.

She emphasised that the use of this option should not be regarded as a sign of failure, noting that such measures are intended to preserve business value, protect jobs, and promote overall economic stability.

“Insolvency options are proactive business recovery tools. We want you to know, as well, that early action is crucial. Identifying the financial issues early and acting early… that’s what leads to successful reorganisation,” she maintained.

Against this background, Evans Roberts advised that the primary objective of the Office of the Supervisor of Insolvency (OSI) and the Office of the Government Trustee (OGT) – joint organisers of Monday’s webinar – is to strengthen the MSME sector by helping operators and owners understand how to make effective use of insolvency options.

She explained that, in order to qualify for assistance under the Insolvency Act, an individual or business must have debts totalling at least $300,000.

“An insolvent person must live, own property or do business in Jamaica, and the [value of the] assets of [that] individual if sold, [would] not [be] sufficient to pay off obligations,” Evans Robert explained.

She noted that the OSI provides several options to individuals facing insolvency, including access to the Proposal Regime.

This mechanism affords insolvent persons the opportunity to engage with creditors and reach an agreement on reorganising their financial affairs.

“The proposal regime is very flexible. It is a debtor and creditor meeting and agreeing to the terms of the proposal. It’s done to avoid bankruptcy… this person has already declared insolvency. So you can’t avoid insolvency anymore… but you can avoid the next step, the last process, which is bankruptcy,” Evans Roberts further informed.

She advised that any business operator who believes they are insolvent may apply to the OSI for an assessment. The OSI thereafter reviews the application to verify the individual’s insolvency status and subsequently provides recommendations based on its findings.

Evans Roberts noted that with the recent passage of Hurricane Melissa, many small businesses are facing challenges and may need support.

“We haven’t hit 12 months since Melissa… so we’re still in the window, if you need assistance. If you think you are imminently insolvent, you can speak up and get assistance. The objective of the insolvency regime is to rehabilitate debtors and preserve viable companies,” she underscored.

- JIS News

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