Expats warned about accruing debt in the UAE

Published:  12 Aug at 6 PM
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In the home country, consumers who run up arrears in credit card or loan repayments don’t face jail or huge fines, although they may face bankruptcy.

For expats and residents in the UAE, the laws are very different, as consumer protection laws don’t apply to those who’re less than careful with their finances. Banks are able and willing to apply to the local court to imprison a debtor until the amount owing has been paid. For locals owing unpaid debts, their relatives are expected to get the amount together and clear the debt, allowing the debtor to be released from jail, but it’s an anachronism for expats, with those owing large sums often forced to leave the UAE in a hurry.

Unfortunately in this day and age, if the sum owed is large enough to warrant further action, UAE banks can have it listed as fraud, resulting in the borrower’s name being red-flagged on Interpol. Should the debtor enter an Interpol- linked state, detention and extradition back to the UAE can follow. If the defaulter is from the UK, UAE courts are able to bring a debt default case through the British courts, resulting in the confiscation of property and/or assets. It’s not just non-repayment of debts which can land expats in a UAE jail as, in spite of a misconception that bouncing cheques is no longer illegal in the Emirates. offenders can only get away with a fine if the amount is below a stated limit. However, the offender still has to repay the amount as the fine is simply punishment for the crime, with the debt itself still able to land its instigator in a UAE prison.

In addition, unlike in most expats’ home countries, there’s no time limit on enforcement, with banks in the region known to still be chasing debtors after 15 years or more. Expats should also remember that the above rules are current not only in the UAE, but in all the Gulf States, making getting another job in an adjacent emirate in order to avoid due legal process isn’t a viable option. Facing up to debts and making arrangements to pay them off over time is the best idea, especially if you’re planning to leave the Middle East for a less expensive location.
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