Questions & Answers
Consequences of failure to pay a commercial loan
Hello Sir,
I have a company and have outstanding loans worth AED 1.9 Million.
We have been paying regularly for over 2 years now, but I have not been able to pay my last EMI. The next one is due soon but I don't have the provision to pay as the business is very dull.
What are the consequences if I cannot pay?
Dear Sir/ Madam,
Normally in this scenario, the bank or financial institution shall fill up the security cheque (if it was blank) and deposit the same.
Considering that the company will be unable to pay now, the cheque will be dishonoured and the legal consequences will follow.
If the cheque amount will be less than 200,000 AED, there will be a fine and the criminal case will get closed.
If it is more than 200,000 AED, there will be an automatic travel ban and subsequently, the criminal court shall pass a judgment which can be both fines as well as imprisonment.
The bank also shall have the option to file a travel ban application in the civil court, and thereafter, a civil suit for the recovery of the due amount.
The civil court will pass a judgment and decree, and thereafter, the execution process shall follow.
Should you require our legal support, please feel free to contact us at +971 56 1060369 or email us at jana@alketbilaw.com
Kind regards,
Khalifa Advocates & Legal Consultants
