9 Things to Know About Debt in the UAE

9 Things to Know About Debt in the UAE

A debt is any outstanding balance due to some organization or individual to another organization or individual. Debt law in Dubai was not as rigid as they are today.

1-Law for Dept in the UAE:

UAE treats debt as a criminal matter rather than a public matter. Loans bounced cheques, and rental payments are included as debts in Dubai. The result is that if a mendicant is late with expenses they have to pay fines and incarceration.

2- What does the law say:

Dubai and the UAE have rigid laws and regulations for defaulters and may start a civil case against them which can result in future imprisonment. The debt law in Dubai and the UAE does not consider the debtor as a source of revenue, they consider them a detainee that some wealthy family members and friends may sell them free by selling a property or any other means. This way, the debt on an individual is portrayed to be a punishment for others as an example.

3- In case of un-fortune circumstances what happens with debt?

The banks in Dubai and UAE do not negotiate in any un-fortune circumstances that an individual may face after issuing a loan, rent, or providing dishonored cheques.

4- Leaving the country in case of Debt:

If you consider that escaping from the country might solve your problem, you are mistaken! The deserter might completely intend to credit their debt by hampering their payments but would opt to confer without being landed up in the prison.

Having dept in UAE, you might leave the country and travel to GCC or a country with debt protection laws you’ll be safe for the meanwhile. But as soon as you return to UAE or any other GCC country, you might be arrested as soon as you land on the airport and prison-up before the entire amount is all set to pay.

The bank might also bluff you by some fake notice of dropping the case to bring you back to the country, but you’ll be arrested in either case.

5- Can a lawyer help in case of debt?

Any lawyer or firm can’t help you in any case. Most of the cases witnessed have concluded up in landing with furthermore worst conditions than before seeking help from them. As a result, the law of Dubai has referred to these agencies or firms as agents protecting the debtors and working against the law.

The state-imposed bankruptcy laws on them and bankrupted debtors all over the world. The bankruptcy laws set by UAE were hyped in the national newspapers as an integral part of the UAE banking sector and a proposal of safeguarding debtors. These laws only limit businesses and not private individuals. Dubai’s law agencies and firms have criticized this law for being fundamentally remote and more likely to be a local relations campaign than an authentic legal alteration.

6- Criminal Penalty for a bounced cheque:

The law regarding Debt in Dubai features article 401 of the punitive code of the UAE that states “A chastisement of imprisonment or a fine shall be imposed upon any person who, in bad faith draws a cheque without no existing or abundant stipulation, or after issuing the cheque any individual who approves or conveys to another cheque payable to the holder, whereas being sentient that there are no existing finances covering its cost, or it cannot be drawn, shall be accountable to the same punishment.

The bounced cheque triggers the right to the creditor to initiate a criminal case against the debtor. 

7- Cheque bounce debtor:

The cheque bounce defaulter (regarding the law in Dubai about debt), may face a penalty depending on the circumstances of the case. It depends upon the reason and motive of issuing behind bounced cheque and the nature of the transaction.

8- How long does a debt case last?

In common punishment cases, the case lasts between 1-3 months and might reach up to 3 years, with a large amount of fine.  

9- Can the debt collecting agencies or security cheque bounce help?

The law in Debt law in UAE are rigid and do not negotiate or compromise with the debtor. The debt is soon passed from the banks to debt collecting agencies and security cheque bounce firms. These firms prove to be ruthless and unprofessional and seem to be manned by uneducated or aggressive. The agencies extract money from the debtors and are provided with a commission to receive as much capital as they could from the defaulters.

They not only harass and torture the debtor, but also his/her relatives, family, and friends. Dealing with front-foot with these agents is not advisable for people who want assistance with the debt situation or circumstances.

Therefore, living in the UAE with debt is the most critical task and any individual t stay careful before any act like opting for a bank loan, rent, inappropriate cheques, or any other unsuitable act might land you up in imprisonment with a heavy fine.

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