PROTECTION OF CREDITORS IN INSOLVENCY PROCEEDINGS: A COMPARATIVE APPROACH BETWEEN RWANDA AND THE USA INSOLVENCY LAWS

Abstract

This thesis whose title is “Protection of creditors in insolvency proceedings: A comparative approach between Rwanda and the USA insolvency laws” analyzes the insolvency law of Rwanda compared to the insolvency law of the USA in relation to the protection of creditors of those countries. In comparing the insolvency laws of Rwanda and the USA, the goal has been to evaluate how effectively each country's legal and institutional frameworks protect creditors' rights during bankruptcy. Research findings indicate that the bankruptcy procedures in Rwanda and the USA are not similar, given the fact that the USA legal system is stronger that of Rwanda and provides more secured measures in protecting both secured and unsecured creditors than in Rwanda. In addition to that, the research found out that the difference resides for the way unsecured creditors in USA are entitle to provide their opinion in a creditors’ meetings and the way the law ranks them is very desired as their voice count during insolvency proceedings while the Rwanda's approach offers relatively fewer protections for unsecured creditors. However, the Rwanda's legal system experiences shortcomings connected to ranking of secured creditors to share the proceeds of insolvency. This is to mean that the insolvency law that does not adequately protect fundamental rights or freedoms that can lead to abuses or violations of creditors in general whereby the trustee is the overall to either accept or refuse the claim of unsecured without clear guidelines to follow. In a nutshell, secured creditors in Rwanda are also not well treated considering to the rights relished by the ones of the USA, that is supported by both judicial expertise and specialised court dealing with insolvency cases that needs to be welcome by Rwanda legal system to effectively deal with insolvency cases that would guarantee the right of creditors in general.