Belize Adopts New Insolvency and Bankruptcy Law

The Financial Services Commission (FSC) has announced the enactment of the new Insolvency and Bankruptcy Act, 2025, which replaces the old Bankruptcy Act that had been in place since 1902 and last amended in 1998. The new law modernizes Belize’s approach to insolvency and strengthens the country’s financial system and economic stability.

The previous law mainly dealt with individual bankruptcy and offered limited options for business recovery. By contrast, the new Act introduces a modern system that covers both individuals and businesses, creating a fairer and more transparent process. It also brings Belize in line with international standards.

The new legislation introduces several important changes. It gives the FSC the power to regulate and license insolvency practitioners to ensure high standards and accountability. It creates clearer rules for liquidations that protect both debtors and creditors. Importantly, it provides new tools that allow struggling but viable businesses to restructure and recover, which could help save jobs.

Special attention has also been given to micro, small, and medium-sized enterprises (MSMEs). A simpler restructuring and debt-relief framework has been designed to help smaller businesses continue operating and preserve employment. In addition, the Act introduces modern rules on financial contracts to reduce risks in the wider financial system, while also including provisions for cross-border cooperation.

The FSC will oversee the rollout of the new law, which will take place in five phases between September 2025 and October 2026. During this period, consultations will be held with stakeholders, new regulations and guidance will be developed, and training sessions will be organized to ensure a smooth transition.

Belize’s international standing also received a boost when, on June 28, 2025, the FSC was accepted as a member of the International Association of Insolvency Regulators. This membership strengthens the country’s commitment to best practices and global cooperation.

According to the FSC, the enactment of the Insolvency and Bankruptcy Act, 2025 shows Belize’s determination to build a fair, transparent, and modern insolvency system. The law balances the protection of creditors with opportunities for businesses to recover, supports MSMEs, encourages responsible lending, and builds confidence in Belize’s financial system.