Personal Loan Debt - A Real Time Nightmare for Expats!

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Personal Loan in UAE
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The loans are sold to expats in the UAE in a huge number. And, the expats willingly accept the credit for meeting the high living costs in the Emirates. Hence, there are a variety of options available when it comes to personal loan for expats.

Now supposedly,

You are an expat and have obtained a personal loan in the UAE. But, due to employment loss, your Visa is canceled and you have no option but to exit the country. Now, you are in your home country and have found a new job. You are trying to make contact with the concerned bank for making the repayment of the outstanding amount. However, the bank has already reported against you with the authorities back in the Emirates.

Tough situation, isn’t it? Wondering how to get out of it? Read on to know.

What is the Exact Mess You Are Stuck in?

There can be two possible scenarios in such a situation- filing of a civil suit against you in order to recover the debt or filing a complaint on the security cheque getting dishonored.

First, let us see what is this security cheque all about?

Generally, the banks within the Emirates ask for cheques from the borrowers against the personal loan in UAE for expats, which act as security against the loan. The banks have the right to get these cheques encashed to recover the dues.

In case of dishonor of this security cheque, the banks are in full right of filing a criminal suit against the concerned borrower as defined in Section 401 of the Federal Law Number 3.

Knowing the Law

According to this law, a fine or detention can be imposed on the following individuals.

  1. Those who purposely submit a cheque or draft without an adequate or at least a drawable balance.
  2. Those who withdraw the entire or a certain part of the balance, making it inadequate for settling the draft.
  3. Those who stop the drawee from getting the cheque encashed.
  4. Those who write or sign this cheque in a way that it does not gets encashed.
  5. Those who endorse the cheque in another person’s favor or provides him with a bearer draft, even after knowing that the account does not have adequate balance for encashing the cheque.

Therefore, it is understandable that the bank has filed a complaint against you when your security cheque got dishonored on submission.

You must also note that the bank even has the right to start a civil suit on your name at the time for recovering the dues from you.

How to Escape the Mess?

Since you readily wish to settle your dues with the bank, you can consider appointing some professional legal personnel from the Emirates who can get in touch with the concerned bank and negotiate regarding an alternative plan for repayment. You can also request for the withdrawal of the suits started or complaints filed against you.

If your bank has agreed to your request and the negotiation and has provided you with an alternative plan for repayment, you would have a chance to pay off the outstanding balance and clear all the defaults on your name. As soon as you clear the dues with the bank, the legal counsel you have hired may then get a “no dues certificate” for you from the bank.

An essential thing that you need to keep in mind in all of this is that you must stay aware of the law. Staying up-to-date with the law may help you in escaping this financial mess. However, in any case, you will have to pay off the loan amount to the concerned lender.

In a Nutshell!

There can be a situation where intentionally or unintentionally you will have to leave the UAE with a personal loan debt behind. In such situations, you must know that you can get sued for the recovery of the dues by your lender.

However, you can get out of the legal cycle by contacting the bank and negotiating with them through the help of a legal practitioner and finding out an alternative for the payment of the outstanding amount.  

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