Can a UAE bank take legal action on a personal loan default that is over 15 years old?

Welcome,

In the UAE, a bank or collection agency can attempt to recover the debt, but the ability to take legal action depends on the statute of limitations.

Typically, the statute of limitations for financial cases is 15 years. If no legal action was taken within this period, their legal claim may have expired. However, this depends on the details of the case and applicable laws.

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While banks in the UAE generally cannot take legal action on debts older than 15 years due to statutory limitations—unless certain conditions apply, such as acknowledgment or partial payment—they may still attempt non-legal methods, like engaging collection agencies for recovery efforts.

Dear questioner,

Yes, the bank can still recover the amount, but certain conditions apply, such as whether they initiated the procedures long ago and if the case is a continuation of the previous one.

There are high chances to settle the case either outside or inside the court if handled prudently.

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Dear Questioner,

Thank you for reaching out with your concern regarding the 15-year-old personal loan default!

In the UAE, the general limitation period for contractual claims, including personal loans, is 15 years. This means that creditors typically have up to 15 years to initiate legal action to recover outstanding debts.

If no legal action has been taken within this period, the claim may be considered time-barred, and the creditor may lose the right to enforce the debt through the courts.

However, it's important to note that certain actions can interrupt or reset this limitation period.

For instance, if there has been any acknowledgment of the debt by the debtor, such as making a partial payment or a written acknowledgment, the limitation period may start anew from the date of that acknowledgment.

Given that a collection agency is now contacting you after such a long period, it's crucial to handle this matter carefully. I recommend the following steps:

- Verify the Debt:

Request detailed information and documentation from the collection agency to confirm the legitimacy of the debt and their authority to collect it.

- Review Your Records:

Check any personal records or correspondence from that time to see if there was any acknowledgment or payment that could have reset the limitation period.

- Seek Legal Advice:

Before making any payments or acknowledgments, consult with a legal professional to understand your rights and obligations fully.

I would be glad to assist you in reviewing your situation and advising on the best course of action. Please feel free to contact me via WhatsApp or phone at [---------] to discuss this matter further.

Best regards,

Suhail Rana