Can I stop the bank taking legal action against me for a missed credit card payment?

Keren Bobker reminds the reader that non-payment of a credit card comes with consequences

Make your credit card payments a priority, no matter how stretched your finances are. Reem Mohammed / The National

I have a credit card and it has reached its limit. I do not have the money to make the payment this month and the bank wants to take legal action. Is there anything I can do?  LK, Dubai

When anyone takes out a credit card, or a loan, they sign a contract to say that they will make the repayments as agreed. With a credit card, there is a stated minimum that must be paid each month, as a percentage of the amount owed. This can vary but can be as little as 3 per cent of the total and interest is also payable. If anyone misses a payment, then they are in breach of the terms of the contract and the lender is within its rights to request payment. In the UAE, a bank will follow up if one payment is missed and if anyone fails to make three payments the bank can register a police case and that can have serious consequences.  Late payment can also incur a financial penalty.

Non-payment of debt is a criminal issue for expats in the UAE and if someone has borrowed money they are legally obliged to pay it back. Banks are strict regarding repayment as too many people take far too relaxed an attitude to the money they have borrowed, and others ‘do a runner’ failing to repay at all. LK needs to speak to her bank and keep them informed as avoiding them will only make a situation worse. She needs to let them know when she will be able to make the payment and ensure she does so without too long a delay to avoid further issues. Without knowing her full situation I cannot say much more apart from stressing that making the repayments on loans and credit cards each month must be treated as a priority.

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I have been in the UAE for 16 days, am employed and came here on an employment visa. The HR department has kept my passport for the last 16 days, preventing me from travelling for emergency family circumstances. Even when I resigned they did not accept the resignation without me serving three months' notice. So I was shocked to learn that they have not yet applied for my residency. I sent a message to them warning them that I will sue them if my passport was not ready soon, as I need to see my son and come back to serve their three months' notice. What if they do not return my passport before I am due to leave? How can I leave this country?  BS, Sharjah

If someone has arrived in the UAE on an employment visa, the employer has to then apply for a proper residency visa. It is normal for a passport to be given to an employer during this process. Although it should start straight away, the process can take a few weeks. If a passport is given back midway and a person leaves the country, the process has to start all over again, incurring costs and delays. I would be surprised if this employer did not have the residency process underway, as they have already paid for an employment visa to allow BS to enter the country. Suing an employer is not really an option in these circumstances and BS would not win such a case and only incur costs.

If employment has commenced, a contract has been signed and the visa process is underway, then BS will be deemed to be properly employed and he can be asked to serve his notice period in full even if in a probationary period. And, as it appears that he has signed a contract for a fixed term, he will be penalised for breaking the contract terms in accordance with UAE Labour Law,  Article 116, which states: "should the contract be rescinded by the worker… the worker shall be bound to compensate the employer for the loss incurred thereto by reason of the rescission of the contract, provided that the amount of compensation does not exceed the wage of half a month for the period of three months, or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract". If anyone signs a contract they are agreeing to the terms and it is legally binding.

An employer does not have to allow anyone additional days off work, above those required for a public holiday, during a notice period. BS can request the return of his passport, which the employer should honour, although I would imagine they are expecting him to abscond, given the circumstances, so may be reluctant for that reason. I hope, however, that given the family circumstances, both parties can come to an amicable agreement and I would encourage BS to have a calm discussion with the company so that there is a satisfactory outcome for all parties.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at [e-mail]. Follow her on Twitter at @FinancialUAE.

The advice provided in our columns does not constitute legal advice and is provided for information only.