Debts can be renegotiated from outside the country

The debtor fled the country following job loss and must contact the banks to arrange a settlement to be able to return to the UAE in the future.

FILE PHOTO: Bank debit and credit cards are photographed in this illustration picture at an office in Frankfurt, Germany, March 17, 2016.    REUTERS/Kai Pfaffenbach/File Photo
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I left the UAE in August 2016 after losing my job in a construction company. Before leaving I had two credit cards and a car loan from one bank, plus two more credit cards from other banks - one with an outstanding amount of Dh82,000 and another for Dh33,000.  I could not return to Dubai due to some difficulties and family circumstances in my country but I want to close these credit cards to avoid any further issues while travelling in the near future. What can be done in my situation? How can I close or repay? Any chance to downgrade the amounts or pay only a kind of fine? PA, Uzbekistan

It is good that PA wants to step up to his legal obligations and repay the money that he owes. Sadly, too many people just abandon debts and this makes it harder for everyone else.  With outstanding liabilities of this size, it is likely that he has police cases registered against him for non-payment of debt so he would be arrested on arrival in the UAE. This prohibits any return unless the debts are cleared and the police cases then lifted. It appears PA has not yet contacted the lenders so he clearly needs to do that. Some banks are more amenable than others but as there is little they can do while he is out of the country, he is actually in a position to negotiate in respect of the repayments. I know of cases where banks have reduced the amount owing to get the debt cleared but this is usually where a lump sum is offered to clear a debt in full rather than when monthly payments are offered. There is no problem in making repayments when outside of the UAE, but PA needs to watch the bank charges in respect of each international transfer made. This is another reason why it can be beneficial to repay the debt in a lump sum. Note also that the longer a debt is unpaid, the more interest is charged although it is possible to request a suspension of interest payments if the debt is due to be repaid in full shortly. In all cases like this, borrowers need to start a dialogue with their bank and if they find that staff are unhelpful, they need to escalate to more senior staff who will appreciate the importance of the borrowing being repaid.

I applied for a finance job with a government entity in Dubai and was just informed that my security clearance did not go through. I've lived in the US my whole life and am a US citizen.  I have no idea why I would be rejected.  Is there really no way to appeal this process or reapply immediately? SB, USA

It is customary for people applying for certain positions in government entities to have security checks undertaken before a job offer is finalised and a visa application is made. The extent of the check will depend on the category of the visa and the reason for rejection is not provided, nor is the UAE Government under any obligation to explain.

It may be that something has shown up on a background check, or that someone with the same name is blacklisted in the system. However, if an applicant believes that there are no issues, then I understand that there are no restrictions on reapplying, assuming the employer is willing to do so. Note that if an application is rejected, there is no complaint process and the decision of the Government is non-negotiable and final.

I am about to sell a company that has several existing employees and I would like to know how much responsibility I have towards them after the sale. I have been told that they are still my responsibility for a period of time but is that right even if I have sold the company to someone else?  BD, Dubai

When someone sells a company that has existing employees the new owner also takes on the existing employees but this is on a joint basis with the previous employer/owner. This is a set out in Article 126 of UAE Labour Law which states, "should a change occur in the form of the establishment or the legal headquarters thereof, the employment contracts valid at the time of the change shall remain valid between the new employer and the workers of the establishment. The employment shall continue and the original and new employer shall be jointly liable for a period of six months for the execution of the obligations arising from the employment contracts during the period preceding the change. Upon the lapse of the said period, the new employer shall solely bear such liability."  In this situation, it is important that both the buyer and seller take legal advice in respect of their liabilities and confirm how matters will be handled in writing.

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

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