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Leaving Dubai – Have You Settled Your Debts?

To pay or not to pay? That is the question.
This question keeps coming up so time to revisit it.
It is an inconvenient truth that no expat working in Dubai is immune to the risk of redundancy or job loss. Should these trials arise at the start of summer, when many expats depart on vacation and recruitment grinds to a near halt, an individual faces additional pressure. In this situation, it would cross many a person’s mind to board a flight with their family and vow not to return to the UAE, seemingly leaving their debts and troubles behind. Unfortunately for those that do make this unwise decision, there is rarely a happy ending. In this article we will consider the laws in relation to debt and debt recovery and how these apply to expatriates in the UAE.

How do banks react to debt?
When an individual defaults on a loan repayment, a bank may not necessarily send an immediate legal notice to the Debtor. The bank would be realistic about the situation and consider the matter from a legal perspective. The bank would have two options; the criminal or civil routes.

The criminal route:
When an individual takes out a loan, he is obliged to give an undated blank cheque to the Creditor (Bank). The loan contract gives the bank the right to cash the cheque in case of default of the Debtor. This would therefore be the first step of the Creditor. If the cheque then bounces, the Debtor will have committed a criminal offence in Dubai. This is set out in article 305 of the UAE Penal Law of 1970, which states that:
“whoever, by bad intent, gave a bad cheque and the balance is less than the cheque value or if it was withdrawn after giving the cheque [whole amount or part of it] that the remaining credit doesn’t fulfill the value of the cheque, the issuer of the cheque shall be punished by prison for a period not exceeding three years, or fine not exceeding 4,000 AED, or by these two penalties together.”

The civil route:
The Creditor can instead commence a civil case through the Court making use of articles from Federal Law No. 5 of 1985 (the ‘Civil Code’). Particularly, article 246 of the Civil Code which states that each contract entered in to must be fulfilled ‘in good faith’ and article 710 of the same Code obliges the Debtor to repay the loan. Default of a loan would therefore result in breach of the Civil Code. In these circumstances, it would be up to the discretion of the Creditor as to whether they wish to enforce the judgment on a Debtor that has left the UAE.

What if the Debtor has left the country?
Under the UAE criminal procedures law, if it can be shown that the Debtor has left the country, it is possible for the Creditor to obtain a Court judgment in absence of the Debtor. After receiving the judgment, as part of the execution process, the Debtor may be blacklisted at the migration department, meaning in future he would be stopped immediately upon arrival to the UAE. This would include any occasion in which the Debtor was transiting through Dubai on route to another country.

In addition, the Creditor can apply for the matter to be registered with Interpol which is the world’s largest international police organization with 190 member countries.

It is also important to note that the UAE has bilateral agreements with many other countries in relation to the recognition of foreign judgments. It is therefore an option for the Creditor to attempt to enforce the judgment through the Courts of the country in which the Debtor has fled.

Overall, it should be noted that new tools are being introduced to make easier to collect money from the Debtor. Any expatriate thinking that loan problems will be solved once they leave the country must think again; the debt won’t disappear. In these circumstances it may be helpful for an individual to contact the bank or other Debtor. It may be possible to negotiate a payment holiday during a period of unemployment, or to extend the term of repayment of a loan to reduce the monthly payments.

Article courtesy of Alexandra Tribe,
Partner & Solicitor (England & Wales)

Al Rowaad Advocates & Legal Consultancy is licensed to perform legal services and advocacy in all courts of the UAE, reaching out to local and expatriate clients. Our strong practice areas are family law, labor, corporate & commercial, private equity, banking, maritime & transport, litigation & arbitration and real estate. Visit our website or email us at

16 Responses to “Leaving Dubai – Have You Settled Your Debts?”

  1. Fahad Bawani says:


    We have cancelled our credit card, but have not collected the security cheque given at the time of application. Can it become a problem in future? Banks normally say that its only a Security cheque and the Property of Bank.

    • Dear Fahad,

      If you have settled all outstanding dues, you are entitled to collect the original cheque, or a letter from the bank to confirm that they will not cash the cheque (including for clarity the cheque number).

      Kind regards,
      Al Rowaad Advocates

  2. Abu Abdullah says:


    i have long left Dubai, UAE with unsettled credit card and personal loan debts since 2003.

    I wish to return to Dubai after I received an employment offer. I understand I may have been on the travel ban list or police case, thus, I am seeking your assistance if you could provide me with details on how I can return to UAE.

    Can I negotiate a repayment scheme once I am back in Dubai and avoid jail upon arrival? I am willing to engage your services if you can assist me.


  3. zameer says:


    I have a personal loan in HSBC BANK of 54k, but i loss an empolyment last month.
    can you please help what should i take next step.


  4. Mhyjoi says:

    I have a friend in Dubai who had released from jail (after 1 month) in year 2011 due for his unpaid personal loan of 100k+ Dhs. He was terminated the reason why he was not able to pay his loan on time until the back filed a police case against him with bounced cheque. Luckily after released from jail, he got a new job and earning about 5k Dhs monthly. Some of his friends used to say that he have to expect for a civil case but as of to date he’s not receiving any notice nor letter either from the bank or court regarding any filed civil case against him. Now he is due for leave/vacation and he is planning to take his leave back home, can he depart from Dubai for vacation without any problem or travel ban?

    • Louise says:

      Please contact the lawyers mentioned in this article for any questions on ‘settling your debts’ as they are the professional body which hold up to date information on the rules.

  5. Ramnath says:

    One of my friend having around 120k dhs loan amount recently taken but now there is a chance to get termination by company due to financial crises in comapny and he is trying for another job but hopeless…and already he purchased asset with loan amount and also he is having car loan even..
    Now he dont have much amount apart of settlement amount it comes around 15k
    So what is step now to do…pl advice !!

  6. Imran says:


    My cousin used my checks to his register company with Ajman free Zone. He stated me that these checks will not be presented to bank and he will replace security checks as he gets his checkbook after registration. Unfortunately, check of 24K was presented and bounced due to lack of funds.

    I am not a partner of this company nor I have any concern. My question is: where do I stand. Should I be considered as defaulter? Will Free Zone take any action against me? Can I go out to my country freely? what is general law, do the go for a case after check bounced for first time or they go for case after 3rd or 4th failure.
    Thanks and Regards

  7. Shahed says:

    Al Rowaad Advocates,

    I have two credit card loans one is from Dubai bank and other is from First Gulf Bank. I was regular payer for both of these till i lost my job back in 2009.

    Even after i tried to repay some of the loan to these bank. As every one knows that 2009 Dubai faced worst financial crises. Even i suffered so much, I lost my job and was forced to exit the country. Again i came on a visit to search for another and thought of repaying the loan amount but this visit was not succeeded and unfortunately i have take an exit in 2009.

    My question to you is how about settling down our loan payments on the principal amount not on the amount where interest was charged to us. Can i will be getting an offer from bank to repay only 60% on principle amount not the 100%.

    Or else i can avail your services to settle down all the remaining dues and getting an NOC from these banks. What will be your charges for your assistance.

    Please let me know how can i check whether am still ban in dubai immigration or only i have to clear the loan amount.


  8. Krish says:

    Dear All,.

    Please assist me on below inquiry,

    I have taken a loan from a bank in Dubai and I left the company due to some personal issues, now I’m in Sri Lanka
    I would like to settle this off as this is a black mark on my career.

    My current package is 50,000 LKR but the monthly installment for the bank is 90,000 LKR
    I can only pay 30,000 LKR from my package as I have expenses back home.

    What do you think?

    Will bank accept this EMI or do I need to pay the agreed EMI?

    Please asset me ASAP.

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