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How to Obtain a No Liability Letter from a Bank in UAE
Posted by PinoyHow by Rafael Roxas on Wednesday, February 01, 2017 at 8:53:51 AM

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How to Settle Credit Card and Bank Loan Debt in Dubai or in UAE
Posted by PinoyHow by Rafael Roxas on Wednesday, August 17, 2016 at 2:51:05 AM

Having an outstanding credit card and bank loan in the United Arab Emirates is a serious business. Everyone having this priviledge should consider it as a cash in your wallet. After all, it is not a free money and it needs to be paid on time.  Once you have defaulted in payment, you have committed a crime according to law.  Article 401 of the UAE Penal code states “A punishment of confinement of one month to three years, or a fine of a minimum of AED1,000 shall be inflicted on any person who, in bad faith draws a cheque with no existing or drawable provision.”

Moreover, payment of penalty and or serving terms does not eradicate the debt. The defaulter still subject to both criminal and civil liabilities. This also means that an individual may not be permitted to exit the country until full payment is executed. 

Remember when you signed that application form? There's a long list of terms and conditions that I assume you don't bother reading ( To be honest, I did not read it too) If you can also recall, you signed a cheque as a guarantee, that is where your trouble starts if you fail to pay your debts.  Article 401 of the Penal Code of the UAE states that “A punishment of confinement or a fine shall be inflicted upon any person who, in bad faith draws a cheque without no existing or withdrawal provision, or after issuing the cheque, withdraws all or part of the fund so the balance becomes insufficient to settle the amount of the cheque, any person who endorses or delivers to another cheque payable to the bearer, whilst being aware that there are no existing funds covering its value, or it cannot be drawn, shall be liable to the same punishment.”

The bank or any financial institution owed will sometimes hire a third party collection agency to recover the debts and or they will file a police report against the defaulter and submit the bank’s correspondences before the police in order to initiate a criminal proceeding against the defaulter. Upon the completion of the investigation by the police officer pertaining to the cheque, the matter will be referred to the Public Prosecutor office.

I believe not everyone having this issue is just being impulsive spender who wants things that are unnecessary.  Some are in serious financial trouble because of loss of employment, critical medical care and some legitimate emergency situation.  Having said that and whatever reason you may have. Still, one must be responsible and pay off the debts.  Running away will only make it worse. If you exit the country before they file a case, you will be banned from entering UAE until your case is cleared.  In some cases, your debts are sold to collection agencies and will continue to chase you for payment in your home country.

Here are some suggestions that may help:

1. Approach the bank or financial instiution for debt consolidation and structured payment scheme - Be honest and ask the bank on how can you settle the debts based on your current financial capability. 

2. Find a law office that can assist you making the debt payment structure more affordable based on your current financial status. I can personally recommend Gulf Law and approach Atty. Barney Almazar to help you out with this situation. 

3. You can also approach debt consolidation management services that can help you reduce your outstanding balance.

If you have any questions and suggestions, please feel free to comment below.

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