What is meant by bank debt in the UAE?
Religion It is a sum of money owed by one person, called the debtor, to another, called the creditor. In economics, debt can be money, goods, or services. Commercial debt is a contractual agreement that includes principles and fundamentals such as the amount and timing of repayment, and can include restrictions, bonds, mortgages, and other examples.
When someone is indebted to someone else, it means that they owe them something. The term debt is used figuratively to refer to a favor done; for example, when someone helps someone else, it is said, “So-and-so owes me a debt.”
Sometimes, businesses or individuals resort to borrowing or taking out debt to complete their financial transactions. A debt is contracted when a creditor agrees to lend a debtor a sum of money, with an agreement to repay the money at a specified time with interest on the principal amount.
How does the Central Bank of the UAE classify types of loans?
The Central Bank of the United Arab Emirates has established regulations for classifying financial transactions and loans, which are divided as follows:
– Regular loans
– Monitored loans
– Substandard loans
– Doubtful loans
– Non-performing loans
For the classification of these lists by the Central Bank of the UAE, the concepts of some classified loans are as follows:
Those classified as “regular loans” are low-risk loans.
Classified as “below average”, it may result in risks and losses due to the inability to repay it.
Those classified as “doubtful” pose higher risks and are less likely to be fully repaid.
When it comes to repaying bank debts in the UAE, there are three methods used to organize the repayment process, as follows:
The final amount must be available and payable in full upon recovery of the debt.
The entire loan is due during the loan term and is withdrawn from the principal balance.
Deduct the amount you paid during the loan term from the total amount, provided that the remaining amount is paid upon request.
What is meant by bank debt settlement in the UAE?
Debt relief means restructuring expenditures, granting a discount at a specific price, postponing and extending the repayment period for a certain period, or even partial or full debt forgiveness.
How to settle bank debts
Banks offer special promotions to settle bad bank debts for individuals in the UAE, prioritizing these offers for credit card and personal loan settlements.
The offers include discounts of up to 60% if the remaining debt is paid promptly. Installment payments can be deferred using payments spread out over three or four months if the borrower is unemployed. The interest rate can also be reduced to zero without any interest charges, depending on the new cash flow.
All banks in the UAE settle bad debts on a case-by-case basis, depending on the severity of the default or default. In addition, some banks offer special offers to encourage debtors to repay their debts.
What are the payment procedures followed in debt collection in the UAE?
Some of the legal procedures that must be followed to collect bank debts in the UAE are as follows:
If a debtor fails to repay their debt to the bank, the bank sends several notices before issuing a final notice and before taking any legal action. The bank may file a lawsuit to demand that the debtor fulfill its obligations. However, banks often resort to using security instruments such as mortgages, where the property is sold to repay the loan. If the check is bounced, legal action is taken, exposing the debtor to punitive measures.
The bank may sue the debtor or bankrupt person after the expiry of the grace period granted to them, which typically ranges from a maximum of 60 to 90 days to repay their debts. The grace period begins on the due date and is extended by 30 days if the debtor fails to pay, as stipulated by law.
What are the types of facilities provided by banks?
Credit cards
Financing Real estate
Loans character
Business needs finance
Cars finance
Banks usually do not resort to taking any legal action and work to avoid it as much as possible, leaving the matter as a last resort in the event that friendly attempts fail. In addition, the bank has the right to pursue the defaulting debtor who stopped paying before the period specified by the Central Bank, estimated at 90 days.
What is meant by debt collection?
Collection Debts and the procedures undertaken by the debtor in order to follow up on the payment and collection of debts owed by individuals and companies. Specialized debt collection agencies act as agents for creditors in order to collect their debts, but for a fee, a percentage, or all of it, according to what is agreed upon.
What is meant by bank debt collector in the UAE?
A debt collector is someone who collects and monitors debts for companies dealing with numerous indebted clients. A debt collector possesses a wide range of skills acquired through the collection process, and as a professional, debt collector contributes to improving the company’s budget and increasing profits. Failure to collect the amounts owed from debtors can almost certainly lead to the company’s bankruptcy.
What are the duties of a debt collector?
The tasks performed by bank debt collectors in the UAE at Samaha Law Firm and Legal Consultancy:
Verify From the required amount
Equip all documents and papers of clients, while maintaining their validity and complete confidentiality.
Review all paperwork and consideration of purchase and contract matters
Provide all the needs that the customer is looking for and gaining the customer’s trust
Write a contract with the debtor the amount to be paid, whether by bank check or promissory note
Set time to pay off debts
Commitment Collecting scheduled amounts
Presentation reports to superiors on his work progress
How are overdue bank debts settled in the UAE?
A committee in the United Arab Emirates works on bank settlement procedures with creditor agencies and banks in accordance with established procedures.
The President of the United Arab Emirates, Sheikh Khalifa bin Zayed Al Nahyan, launched an initiative aimed at reducing personal loans that burden low-income citizens. The fund has already begun addressing the situation of citizens who are unable to repay their loans.
Members The committee includes representatives from the Ministry of Presidential Affairs, the Abu Dhabi Crown Prince’s Court, the Abu Dhabi Department of Finance, and the Central Bank. Debtors with distressed debts must complete settlement procedures with their banks and creditors.
Obtaining Fund facilities to settle bad debts:
– The applicant must be a citizen of the United Arab Emirates.
– He must be on top of his job.
– Have a salary or fixed income, including retirees.
In addition, we are fully prepared to provide all legal consultations regarding bank debts in the UAE, completely free of charge. You can now request a consultation or present your case by contacting us via the numbers: +971544447773 or through our Facebook: Samaha group for Law and Legal Consultations .
