Questions & Answers
Consequences of defaulting on paying loan installments
Dear Sir,
Need your advice. I took a loan of AED 64000 more than a year back and currently the outstanding amount is AED 51000, but as I don't have a job now, I am unable to pay the rest.
As I know from 2019, there is no imprisonment or criminal case, but if the bank files a civil case against me the fine will be around AED 5000 imposed upon me by the court.
Currently, even I don't have a single penny and I am struggling for daily expenses.
Kindly let me know how much time will the court give me to pay the AED 5000 fine.
What will be the consequences if I can't pay the fine within 1 month or 2 months time?
Also, let me know how I will be able to lift the travel ban if the bank imposes it on me somehow.
Dear Sir,
Thank you for reaching out to me on this.
Please note that if the bank holds your security cheque, then it can bounce and file a criminal case. You will escape imprisonment only in Dubai, but then there is a risk of imprisonment if the case is filed in another Emirate.
With respect to the civil case, the notion that there will be a fine of AED 5000 is misplaced as in the civil case the court will order you to pay the full amount of the loan. Without paying such amount, you won't be able to leave the country.
I would advise that you enter into a negotiation with the bank to settle the loan for a lesser amount in view of your financial position.
I trust you will find this appropriate.
Regards,
Hari Wadhwana
052-9495731
