Though euphemisms abound, failure to repay debt – in the UAE or any other country – is just another word for stealing. Of course, the most obvious advice would be to live within your means and don’t take on debts you couldn’t repay in the event of a job loss or some other financial catastrophe. But you should know that in this country the consequences can be severe if you fail to pay back money you have borrowed.

Bouncing a cheque
Though many people don’t use cheques on the same day-to-day basis in the UAE that they might at home, it’s still possible to find yourself with insufficient funds when a cheque goes to clear your account – especially in cases such as a car loan or an apartment where you are required to hand over a stack of post-dated cheques to cover each future payment.

Many banks offer an overdraft service to safeguard you in just such instances; the rates won’t be as low as you might get in Europe or the States, but it is still worth having the facility even if you don’t intend to use it.
In addition, most banks are willing to accept the occasional oversight and will simply request payment plus a fee for being overdrawn. If you have a savings account or other assets with the same bank, they may dip into those funds to cover a cheque that is in danger of bouncing (there’s a good chance they won’t ask your permission to do this, and they may not even tell you it’s happened).

If your account is regularly overdrawn without authorisation, or if you fail to come up with the required funds, you may well find yourself spending time in jail. This is not an empty threat; it’s not uncommon for people to serve time for this offence – even company managers with signing authority who are sometimes held liable for an organisation’s debts pending a court decision.
The situation begs the question, “How can I earn the money to repay my debt if I’m sitting in jail?” but that’s the law, so beware.

Failure to repay a credit card bill or personal loan
As with cheques, banks in the UAE have built in safeguards to help you if you find yourself unable to repay credit card debts or loans. For an additional fee, you can set up a type of internal insurance policy with the bank to cover these payments if you’re unable to make them normally.
Unfortunately, many people who are doing well financially opt to save money on this insurance and only seek help once it’s too late.

You’ll recall that when you set up your bank account and/or credit card, you would have been required to provide your passport details and a salary certificate. With this information, your bank can contact your employer; in certain circumstances they may be able to garner your wages, and they will certainly pass on your details to the authorities in the event that you leave the country.
At the very least, that lending institution is likely to contact you repeatedly; many people have used the words ‘harass’ and ‘hound’ to describe hourly phone calls. Your best bet is to contact your bank, cap in hand, and see if you can work out a repayment schedule of some sort.

Absconding with outstanding debt
Once upon a time in the UAE, if things got bad enough an expat could just get on a plane and leave it all behind. According to press reports earlier this year, over 3,000 vehicles have been found abandoned at Dubai airport, their owners having fled the country unable to repay various loans and debts.
If it’s just that bad, you should know that the GCC countries do monitor travellers moving between them. If you leave the UAE under a mountain of debt, therefore, you could get busted in a neighbouring nation.
The UAE doesn’t currently have extradition or joint-prosecution agreements with most Western countries. But that isn’t the only way a lender can pursue repayment. Take the case of the Australian expatriate who deliberately borrowed as much money as he could before leaving Abu Dhabi for his homeland. Though the UAE banks to which he owed thousands of dirhams were unable to extradite this man, they were able to locate him and subsequently sold his debt to an Australian collection agency that has the full weight of the Australian government behind it. Needless to say, the debtor in question has had to face the consequences. So don’t count on absconding to solve those financial woes.

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