Defaulting on the payment of a loan EMI and legal consequences

Dear Sir/ Madam,

Thank you for getting in touch with me on this.

Firstly, I would like to state that from your situation, there are two liabilities that can arise i.e. Criminal and Civil.

If there are constant defaults at your end to pay the EMI, then the bank will deposit your security cheque which will bounce.

Thereafter, the bank will file a police case against the cheque bounce. This will result in an automatic travel ban against you.

The bright side is that due to the new law applicable in the Emirate of Dubai, if the cheque amount is less than AED 200,000/-, then you are liable to pay a fine only and not face any imprisonment.

This will be applicable to you and you will be able to dispose of the case by paying a fine only.

Once you pay the fine amount, the criminal case and travel ban will be lifted. However, this will only extinguish your criminal liability.

The bank still has a right to pursue the outstanding through filing a civil case (in theory they can but the probability is low).

They will contact you, your employer and reach out to your home town too for chasing the amount.

As of now, I would only advise that you keep money handy for payment of fine when they file a criminal case against you.

I trust you will find the above satisfactory.

You can get in touch with me on 052-9495731 or email me for further assistance and clarification.

Regards,

Hari Wadhwana