Picture for illustrative purposes only. ARCHIVE

If you have defaulted on payments for your bank loan or credit card in the UAE, what are the possible scenarios that could happen next? Expatmedia.net spoke to legal expert Mohammed Fazil, managing partner of FranGulf Legal Consultants in the UAE, to talk about one of the most common cases in the UAE. First of all, when you default on debt payments, “banks will use the security cheque, if available, that you provided for the loan or the credit card. They will deposit the cheque and if you have insufficient funds in your account, the cheque will bounce. A bounced cheque can be used to file either a criminal case immediately or later a civil case against you,” Fazil said. The expert further answers your most frequently asked questions:

What happens when a criminal case is filed against you?

Once a criminal case is filed against you, you will have an immediate travel ban. This puts you on the wanted list, which means you will be taken into custody by the police or by airport police when you are going to travel. Usually banks do this tactic, which is the most convenient way for them to file a criminal case against you.

Will you be detained over unpaid debt in the UAE?

In Dubai, a criminal case for bounced cheque valued at up to Dh200,000 can be settled with a fine. For example, if you have a case filed in Muraqqabat Police station and the amount you owe is Dh100,000, you can go to the police station directly. At the police station, by the order of the prosecution, you will be asked to pay a fine of up to a maximum of Dh10,000. You can pay the fine and clear the criminal case. This time, your name will be removed from the wanted list, and you are free to travel out of the country.

Can the bank still go after you even after you have cleared your criminal case?

Yes. The bank can file a civil case against you for the realization of the unpaid debt.

What happens when a bank files a civil case against you?

In order to recover your unpaid debt, the bank can file a civil case against you using the bounced cheque or account statements. For this, the bank will have to pay court fees and other expenses, hence, usually before filing a civil case, the bank will try their maximum to settle the matter with you. At the failure of reaching an amicable settlement, the bank may file a civil case. Once a civil case is filed, you have the right to defend yourself in court. You can tell the judge the reason why you defaulted in payment. In the end, the judge will pass a judgement. Usually, the judgment is for you to pay the money that you owe. You have the right to appeal the judgement. If there is no appeal after the judgement, the bank will file for execution of the judgement 30 days after the ruling. Once the execution is filed, your name will once again be flagged in the system and you will have a travel ban. You also need to pay the full amount that you owe, based on the court’s ruling.

When must you seek the help of a lawyer?

If a criminal case is filed against you in Dubai for an unpaid debt of less than Dh200,000 you don’t even have to approach a law firm. You can approach the police station directly, pay the fine and settle the case. If the case is filed in any other emirate, you will need the assistance of a lawyer. It is ideal and advisable that you get the help of a lawyer to help you navigate the legal system there. ICA/Expat Media
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