Loan Defaulters in UAE

There are loan defaulters in UAE as there are in countries around the world but the fate in store for Loan Defaulters In UAE is completely different. Especially if you compare the western countries to the GCC. 

Some of the differences are

• Loan Defaulters In UAE Face Criminal Case in UAE.

Once you have defaulted on a loan in UAE the banks will proceed to depositing the security cheque. As a result of the cheque bounce the banks will file a criminal case against you as it is a criminal offense under UAE law.

Now there have been changes to the law in January of 2022 under which there needs to be criminal intentions proven. For example signing the cheque in a way that it does not pass, withdrawing the funds before the date on the cheque. Because of this banks cannot file a police case for a cheque bounce but will proceed directly to court. This is known as a cheque execution case or PLE filing (procedures of litigation and filing). 

• Loan Defaulters In UAE Face Travel Ban in UAE or even GCC.

As a result of the cheque execution or criminal case there will be a travel ban against you. Which means you cannot enter or exit UAE. A GCC wide travel ban can also be imposed in some cases. The banks in UAE manually select these accounts where they want to impose a GCC wide travel ban. 

If you want a debt settlement UAE  consultation you can book your complimentary consultation by clicking on the button below, simply select your date and time with other details and we will get  back to you.

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Other repercussions of a default in the UAE are similar to that of any other country. Below mentioned repercussions are similar to that of defaulters of other countries. 

• Lowering of credit score.

Most countries have a centralized banking system which keeps track of liabilities and their repayments. Under this system every individual gets a credit score and this is reflective of your repayment. A similar system is the Etihad credit bureau for UAE which although new is at par with the ones in other countries.

• Interest and charges.

The banks will continue to add interest and charges and late payment fees on the pending amount. This can grow very quickly especially in case of credit cards.

• Insisting on legal charges incurred by the bank.

If the banks proceed with a civil case in addition to the above the charges incurred by the bank will be passed on to the customer. 

• Employing Collection agents or third party agencies.

UAE banks will take services of collection agents, law firms and call centers. These third parties work on a commission basis as a result every time you pay a part of it goes to them directly.

• Legal Notice.

One of the first actions that the bank takes is to send a legal notice to the customers. This does not always mean that a case has been filed. Many times it is simply to convey intent that the bank will file a case in future in an attempt to recover their money. 

Sadly this is the law of the land and it allows banks and their subsidiaries to get away with it. As the state of UAE does not offer citizenship no matter how long an individual may live there. Hence in order to safeguard their interests and investments the laws are in the favor of the country’s economy. 

If you’re looking to check your travel ban status to check if you have any case registered against you. Simply click here to upload your documents.