Leaving the country? Here's what you must know if you are traveling out of the UAE without paying off your bank loans or credit card debt.
Avoid legal trouble with unpaid debt in the UAE with this informative guide.
If you are planning on leaving the UAE with unpaid debt, there are some legal things you must know before you pack your bags and book your ticket.
When travelling out of the UAE with an outstanding bank loan or credit card instalments, you could potentially face some legal repercussions at the airport or when you're in another country.
To help you out, we've put together this expat guide that has everything you must to know about leaving the UAE with unpaid bank loans or credit card debt, including what could happen if you try to leave the UAE before paying off your debt, and tips on how to avoid legal trouble.
What happens if you try to leave the UAE with unsettled debt?
1. Will you be stopped by UAE Immigration for debt?
First and foremost, there's the concern that if you try to leave the UAE with credit card debt or an unpaid bank loan, you could potentially be stopped at the airport. However, this is an unlikely occurrence.
For that to happen, your bank will need to have made an application to the Court with a case that you are likely to leave the country without settling your debts. A travel ban must be legally placed on you then.
To avoid being stopped at the airport for unpaid debt, you will need to make sure that your debt repayments are up to date and have not missed payments.
2. The outstanding sum might be taken from your pay.
To reduce the outstanding sum, the bank will take payment from your existing account in the UAE, final salary payment, or your gratuity pay/end-of-service benefits without your consent. This is common practice in the emirates and while you can ask the bank to not do it, it is still up to the bank's discretion.
3. You cannot close your UAE bank account.
If you have an outstanding debt in the country, your bank in the UAE will not allow you to close your account when money is still owed.
Your bank account will remain open for debt repayments. It may be changed to a non-UAE resident bank account, and will be closed when the outstanding sum is fully paid off.
4. The bank might file a case against you.
If you've failed to pay 3 consecutive instalments or 6 non-consecutive payments of the monthly instalments without the approval of the bank, then you might be landing in hot water.
The bank may pursue a legal case against you for default, use the security cheque which you provided at the time of availing the loans, and place a travel ban which will result in you getting stopped at the airport - you cannot leave the UAE.
Tips to legally leave the UAE with a bank loan
Before making any plans to leave the UAE, be sure to read the following so you can work towards settling your debts, and avoid running into trouble with the bank later.
1. Repay your debts as soon as possible.
If you are only paying back the minimum amount each month, note that you will be charged additional interest.
The interest rate on UAE credit cards is quite high, so ideally you would want to settle your debt as soon as possible before traveling out of the country so you are not spending more money on interest.
2. Discuss it with your bank.
Before leaving the UAE with an unpaid load or credit card debt, we suggest speaking with the bank for an amicable deal regarding a payment plan or schedule.
You can still repay your debt while outside of the emirates and if you're not longer a UAE resident.
3. Try to avoid skipping on payment instalments when they're due.
If you've failed to pay several consecutive monthly instalments of your debt without approval of the bank, then the bank might start a legal case against you for default.
Timing is important. Pay your monthly dues on time, or settle a payment schedule with the bank first with the guarantee that you will eventually complete it.