Loan Defaulters & Bank Settlements – Finance & Banking


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Do you have bank loans and credit card payments in progress?

Some debts are fun when you get them, but none are fun when you get ready to get them out.

Often times, unexpected events can surprise a person in various ways like a job change, personal emergency etc. which can quickly derail them. Therefore, in the long run, one can “default” on paying credit card bills or loans. Banking regulations today can be as monotonous as they are laborious. The joy of swiping your credit card while avoiding the inability to repay the same or loan default could lead to drastic and difficult scenarios such as the bank imposing travel bans or resorting to legal action. severe, including check rejection and civil lawsuits filed for collection. How to sleep peacefully at night with the fear of such a lawsuit hovering in his mind while still being disturbed by the negotiations with the bank sharks as well as the stubborn debt collectors?

Cases involving failed businesses or people on the run will face legal consequences such as lawsuits, lawsuits and other legal remedies that banks and / or their lawyers in Dubai or overseas may choose. to engage. In addition, Interpol’s red alert is also a consequence of such a default. In addition, there are also cases where people cannot return to Dubai due to domestic / family emergencies, premature job loss being communicated while in their home country, or when ‘an employee is undergoing medical treatment for a long time. The so-called “involuntary defaulters” wish to settle their debts with the banks and wish to return to the United Arab Emirates (UAE) to secure their future and work in the country.

Of course, any lender is suspicious and this applies to credit specialists regardless of whether it is an individual, association, foundation, or sovereign government. The meaning of “default” in the Oxford Dictionary means the inability to pay, act, not answer cash calls, etc.

Limited understanding of UAE laws and regulations, lack of language or procedural skills, inexperience in negotiation skills, unreasonable and untimely pressure from debt collectors, coupled with lack of security, deters or prevents unintentional defaulters from settling their affairs by timely. It is essential to become familiar with local laws, understand your legal rights, obtain the correct set of settlement documents, know the penalties and interest that may be imposed, return security documents, understand the precise process in addition to ensuring fair negotiations as they are all very important in such a process. A default is also viewed by a bank as a serious and grave breach which often compromises communication between the parties, leading to an impasse, thus preventing the defaulter from re-entering the UAE.

Non-compliance with checks and travel ban?

In most loan and credit card default situations, it is sufficient to deliver signed blank checks as collateral to banks and / or their agents for prompt loan repayment or card acquisition. credit, which is now the trump card held against the debtor in a bank settlement by the bank. These checks are used by creditors as a weapon against debtors by blocking the check and making immediate criminal complaints followed by a travel ban.

In addition to criminal action, banks may further assess and opt for other remedies such as civil action or consider other measures that their counsel may deem appropriate in the best interests of their client, the bank.

Having said that, it is imperative to understand that in accordance with a criminal order Decision number (1) of 2017 (Emirate of Dubai), 2019 Decision Number (119) by the Head of Public Prosecutions of the United Arab Emirates (for the United Arab Emirates) as well as 2018 Decision Number (2) (Emirate of Ras al Khaimah), checks in the amount of up to AED 200,000 (two hundred thousand UAE dirhams) may be punishable by imprisonment for any bad checks or for small claims which is at the discretion of the prosecutor to refer the case to the courts of the United Arab Emirates or not. Banks can, however, present these claims to the authorities, where defaulters will be liable to a fine (without being subject to a court order or prosecution).

Events that may constitute a default in the loan agreement include, but are not limited to:

  • Escape from judicial judgment;
  • Bankruptcy or insolvency proceedings against the borrower;
  • Significantly opposite change;
  • Breach of guarantees, commitments and declarations;
  • Force majeure.

General clauses of the loan agreement

Some clauses that are typically incorporated into a loan agreement include:

  1. Renounce: this is where the lender agrees to waive the default or the event that gives rise to the occurrence of a default;
  2. Abstention: It is there that the banks agree not to announce an occasion of default to practice cures;

Negotiate with an expert …

It is in difficult situations like these that banking experts who specialize in bank negotiation and loan settlement come in. Yes, in an expatriate country there are multiple changes in a person’s standard of living and financial situation, which sometimes leads to a default, but does not make someone a willful default. .

Lawyers specializing in bank settlements will review the situation as well as the facts which will represent you before the disruptive debt collectors and the respective partners of the debt collection banks. Having a specialist lawyer in UAE will give the debtor a consolidated chance to have a flexible payment plan or concession on your interest amount sometimes with principle and provide you with the cushion to plan your finances.

A bank settlement expert helps mentally secure debtors for the unpaid amount, who now display their involvement in waiting for a logical loan settlement rather than suing a defaulter. Services provided by bank attorneys include drafting and responding to legal notices, telephone, email and mail correspondence with creditors and banks, as well as attending the settlement meeting on behalf of the creditor.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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