- November 9, 2021
- Posted by: Sarbavoum Bidhar
- Categories: Financial Services, Loan restructuring program
When you issue a cheque to someone, you are expected to honour it. A bounced cheque falls under criminal law in the UAE and can lead to fines and penalties. Bounced cheques can also lead to civil proceedings against the borrower.
If a case is filed against a borrower, the police will call them to the police station and ask them to explain their reasons behind the bounced cheque. If the case is not resolved in the police station, it can lead to an arrest warrant and even a travel ban against the borrower.
Options Available with Borrower
In such instances, borrowers can resort to the following:
Resolve the Case at the Police Station:
The borrower has the option to pay the due amount at the police station and prevent legal proceedings. They can also ask for more time to pay the amount due. The police can give them more time to settle their debt by confiscating their passport.
Discuss the Situation with Your Lenders:
Try and understand the reason why they have filed a case against you. If you are having insufficient funds due to either a job loss or a pay cut, explain this situation to them. Keep them updated if you are expecting a new job. Show them your genuine intent to repay, and try and convince them to withdraw the case.
Take Stock of any Saleable Assets
Criminal and civil cases can have a huge impact on your future employment prospects in the UAE. If you have any assets, such as property in your home country, try and dispose of them to settle your dues with your bank. A clean legal record will make it easy for you to get a job in the UAE.
Seek Professional Help
Professional debt managers have vast experience in devising favourable debt restructuring plans that are favourable for both the borrower and the lender. Consider taking the help of a professional debt management firm. They will thoroughly analyze your financial situation, and guide you on the best possible solution.
FREED can Help!
FREED’s team of debt management experts have more than 40 years of UAE experience in the banking and real estate sectors. They have helped hundreds of people by negotiating loan restructuring programs between borrowed and banks.
FAQ
What happens if a bank loan is not paid in the UAE?
If a bank loan is not paid in the UAE, it can lead to legal proceedings against the borrower. If it’s a mortgaged property, the bank has the right to sell off the asset to recover its loan. If a borrower is unable to pay the bank loan, they can face other severe consequences such as a jail term or a travel ban on entering the UAE.
Is it better to pay off a mortgage or save off money?
It is always advisable to pay off a mortgage as it can help you save on interest payments. Also, an unpaid mortgage comes with a lot of risks. As seen during the pandemic, people suddenly lost jobs and had a hard time paying their mortgages. An unpaid mortgage can lead to severe consequences such as losing the property, a jail term, or even a travel ban.
