Leaving your unpaid debt behind in the UAE is a recipe for disaster on so many grounds – You would face police action and legal charges, debt collection agencies would hound you endlessly, you could be looking at a jail term if you were to come back to the UAE… And did you know you could be detained at a UAE airport even when transiting through the country?
All of the above scenarios sound scary, right? That’s because they’re supposed to act as deterrents to borrowers running away to evade their debt commitments.
We at Souqalmal.com understand how daunting it can be to handle debt that has spun out of your control. And even though it may be tempting to just sweep the problem under the rug, it is in your favor to address it and find a permanent solution.
Our team rounds up some of the easiest ways to manage your UAE debt from overseas.
Keep lenders in the loop
It is fairly common for banks in the UAE to work with international debt collection agencies to track and chase absconding borrowers. Therefore, instead of dreading the moment a debt collector contacts you, you must proactively keep in touch with your bank and credit card providers. Whether it is by email, phone or post, explain your current circumstances to the lenders – Why you had to leave, your intention to keep up with the repayments, how your financial situation has changed and your eagerness to work with them towards finding a mutually acceptable repayment plan.
Negotiate a settlement
When trying to negotiate a solution to your debt woes, it is always better to talk to your bank instead of the debt collection agency. The bank may be more forthcoming in terms of finding an amicable solution, while a debt collector may be more interested in pressuring you into repaying all your debt without any scope for negotiation.
It is also important to enter the negotiations with realistic expectations. Most banks would initially ask you to put down a lump sum payment to settle your debt in full. This may seem impossible for those struggling financially, but from a purely financial perspective, it is the best deal you’re going to get. The bank may also be willing to waive off late payment penalties and some or all of the interest.
However, if a lump sum payment is out of the question, your next move should be to negotiate a new payment plan with revised terms of repayment. Converting your credit card debt into a fixed-interest loan and extending the tenure of your existing loans are some feasible options to help make repayments more manageable for you.
Whichever way you steer the negotiations, always keep a record of all communication with the bank and obtain proof of all formal agreements in writing. In case the bank has initiated legal proceedings against you and has filed a police complaint, ask for written confirmation that the complaint has been withdrawn once a settlement is reached.
Appoint a legal representative
If a considerable amount of debt has been left unpaid in the UAE, especially in case the bank has already filed a police complaint, it may be a good idea to take legal assistance to handle the situation better. Your legal representative can approach the banks on your behalf and counsel you on how best to repay your debts, while ensuring all legal charges are dropped once you’re put on a revised repayment plan or have reached a settlement agreement with the bank.
You could be held legally liable to repay your debt anywhere in the world. The UAE has bilateral ties with many countries and local legal judgements can be enforced outside the UAE as well. So irrespective of whether you’re planning to return to the UAE in the future or not, it is in your best interest to settle your debts for good.