The Debt Panel: 'My business cheques bounced and I owe $108,900'

The former resident has liquidated assets in his home country and is seeking advice on how to negotiate with banks to pay off his debts and return to the UAE

Mathew Kurian / The National
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I am 64 years old and was a UAE resident for more than 30 years. I once owned a thriving business, which ran into hard times during the coronavirus pandemic.

With global trade coming to a standstill in 2020, I could not source supplies and many of my cheques bounced.

Without a source of income, I was forced to miss loan and mortgage repayments and had to take out excessive credit card debt. I now owe multiple banks in the UAE a cumulative debt of about Dh400,000 ($108,917).

I left the UAE in September 2021 after facing relentless pressure from collection agents. However, my family is still based in the Emirates.

I have now sourced some funds by selling property and liquidating other assets in my home country. I wish to return to the UAE to meet bank representatives in person and restructure my debt.

Will I be prevented from entering the country for defaulting on my loan and other commitments? How can I find more information on whether the banks have initiated legal proceedings against me?

In addition, can properties under my name in my home country be attached to the banks that I owe, during legal proceedings in the UAE? Should I transfer the titles to family members? Can you advise me on what I should do? SS, Dubai

Debt panellist 1: Steve Cronin, founder of

Small business owners are extremely vulnerable in economic downturns and I’m sorry to hear that you are facing these issues at a time when you might be considering retirement instead.

Individuals need an emergency fund of six months’ total expenses and businesses up to 12 months of expenses to be able to survive the unexpected.

The danger in good times is that you don’t save enough and build up your business and personal expenses to a level that is unsustainable in a downturn. This then triggers the debt spiral you have experienced and harassment by debt collectors.

After selling your property and liquidating other assets, it is not clear if you can pay off the full amount of your debt or only part of it. If you now have the cash to pay off the full amount, the process should be smoother.

Dealing with multiple banks is tricky. Rank them by size of debt, responsiveness to calls and emails, and willingness to negotiate. Paying off a few smaller debts now to reduce the number of banks you are dealing with should simplify matters.

Emails generally don’t suffice, so you will need to call each bank — perhaps multiple times — to get through to a decision maker before you return to the UAE.

Be very clear about your finances: how much you can repay upfront and whether you have any income streams from your business or elsewhere. Your main bank may be willing to consolidate the debt of the other banks and offer a full restructure of the total amount owing.

You may face challenges if you return to the UAE. Even if a criminal case has not been filed against you, a civil case may have been.

Banks may say it is OK for you to return, only for you to find out it isn’t — they have much more leverage over you when you are present. You are probably better off remaining in your home country until you can pay off the debt in full.

You may be able to obtain a power of attorney (PoA), so that someone can act on your behalf in person to the banks. You can also contact the police to see if there is a case filed against you.

If you are not in the country, it will be difficult for a bank or court to seize a property outside of the UAE, although they could pass your case over to a debt collector in your country, who would then contact you.

Transferring the title to a family member opens you up to legal costs and taxes, plus the risk of not getting it back. This would be a last resort if you are determined to return to the UAE without your debt being resolved.

Debt panellist 2: R Sivaram, executive vice president and head of retail banking products at Emirates NBD

You have gone through some very unfortunate circumstances and I empathise with your situation. I am glad, however, that you are being conscientious and want to work towards settling your debts and return to your family in the UAE.

There are a few options for you to find out if there are legal proceedings in your name.

You could reach out to the banks and ask them to confirm whether there is a case registered and how much is owed, then start to discuss what you can do to repay the outstanding debt.

You should earnestly express your intention to settle all debts and negotiate a feasible repayment plan with each of them. As you have some funds, you can — based on your conversation with the bank — demonstrate your intent to repay by remitting some money towards the debt.

I would urge you to ensure you have clear email correspondence with the banks before you initiate any repayment.

Otherwise, if you have given PoA to someone in the UAE, they could reach out to the police to understand if there are cases registered against you.

Dubai Police also has a free online service that enables residents in the UAE to check if they have a travel ban due to financial cases. This is for the emirate of Dubai only.

Lastly, you could look at engaging a lawyer in the UAE with PoA who can get all the information on legal proceedings and the best way to go about settling your outstanding debt. The lawyer could also guide you on transferring ownership of assets to a family member.

I wish you the best at arriving at a suitable solution.

Debt panellist 3: Felicity Glover, personal finance editor at The National

The Covid-19 pandemic has disrupted many small businesses around the world and I am sorry to hear that you are one of them.

While it is not ideal, you are fortunate to have some assets that you can sell to repay your debts. It is unclear if you now have the money to pay off all your debts at once but if that is possible, it should be your first priority.

From your letter, it appears as though you have two main issues: missed instalments on loans and credit cards, which have been escalated to a debt collection team, and bounced cheques.

Communication with all of your banks is key to successfully restructuring your debts and this is always better to do in person.

I understand that this is difficult because you are currently outside of the UAE. However, as my fellow panellists have suggested, a PoA could be the way forward as they will be able to act on your behalf.

In December 2017, the Dubai government issued an order under which a range of minor offences — including bouncing cheques — will no longer be put through the emirate's court system. Instead, they will be treated as misdemeanours subject to financial penalties.

This means that those responsible for cheques bounced in Dubai emirate of up to Dh50,000 are fined Dh2,000, while those who bounce cheques with a value of Dh50,000 to Dh100,000 pay a Dh5,000 fine. The fine for bounced cheques with a value between Dh100,000 and Dh200,000 is Dh10,000.

However, it is possible that your bank has filed a case against you for the bounced cheques. If this is the case, I would suggest seeking advice from a lawyer to help you to negotiate with the bank to drop it as part of your restructuring discussions.

I wish you all the best in finding an acceptable solution that will enable you to return to the UAE and be with your family.

Updated: May 04, 2022, 6:02 AM