‘What happens to my husband’s UAE debts if he dies?’

The surviving spouse is not directly responsible for outstanding debts and should not be asked for repayment

CHICAGO - DECEMBER 6:  A sales associate works on a customer's transaction with a credit card at Cut Rate Toys December 6, 2004 in Chicago. Personal debt is reaching record highs and personal savings is reaching all time lows, yet consumer spending accounts for two-thirds of the $11 trillion US economy.  (Photo by Tim Boyle/Getty Images)
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My husband owes a lot of money on credit cards to three different banks. He spent the money without my knowledge and it is going to take a long time to repay it. I am concerned that if something happens to him, I would have to pay it back and will not be able to support my parents and children. I don't have any debts, but what happens to a person's debt if they die in the UAE? MG, Sharjah

Under the UAE law, only the person whose name is on the debt is accountable for it and that applies whether it is a mortgage, a personal loan or a credit card. A spouse is only liable if a debt is in joint names, they have provided a security cheque or they are a guarantor.

If any person dies and has outstanding debts in the UAE, the surviving spouse is not directly responsible and should not be asked for repayment. That said, any debt should be settled from the estate of the deceased before money can be passed to any beneficiary. This is one of the many reasons why proper life insurance is advisable if there are debts and/or dependents.

In this situation, the debt is not in MG’s name, so she is not personally liable, but the outstanding debt could affect what she would receive from any money left from her husband's estate if he dies.

I have just renewed my third two-year work visa for a company in Mussafah. I am three months into the contract but want to cancel it as I am bored. Can I cancel it without the company forcing me to pay for my visa and other expenses? They expect me to pay for their costs in bringing me to the UAE. KO, Abu Dhabi

It is unfortunate that KO agreed to renew the visa as he will now be penalised if he breaks the terms of the contract. It doesn’t matter how long an employee has been with a company, Article 116 of the UAE Labour Law applies.

This states: “Should the contract be rescinded by the worker … the worker shall be bound to compensate the employer for the loss incurred thereto by reason of the rescission of the contract, provided that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.”

This means that KO can be penalised for the equivalent of 45 days of salary if he resigns.

This is legal if a fixed-term contract is broken but no employer is permitted to pass on any costs that they have incurred in employing any staff. This is covered in Ministerial Order 52 of 1989, Article 6a, which makes clear that the employer is “responsible for the recruited labourer, the bearing of his recruitment expenses” and this cannot be passed on, no matter the circumstances.

It is mandatory for employers and sponsors to provide Dubai Health Authority compliant medical insurance

My boss told me that our company medical insurance was being renewed and that I would be able to claim back any costs. When I was ill, I consulted a doctor and paid the bill myself, but when I tried to make the claim, the insurance company told me it wasn't valid. My boss now says it will be sorted but we are left without cover. What is the legal position and what can the staff do? NF, Dubai

It is mandatory for employers and sponsors to provide Dubai Health Authority compliant medical insurance in accordance with the Dubai Health Insurance Law No.11 of 2013. Article 10 of this states: “The employer shall be obliged to do the following: 1.) Provide health insurance coverage for employees, in accordance with the health insurance policy applicable … 3.) Verify that the health insurance of the employees is valid for the length of their work period.”

This is backed up by Article 96 of the UAE Labour Law: “The employer shall provide the workers with the medical care means in accordance with the standards determined by the Minister of Health and Social Affairs, and in conjunction with the Minister of Health.”

If an employer fails to provide the required cover, a complaint can be registered with the Dubai Health Authority and they can impose penalties on the employer for breaking the rules, in accordance with Article 23 of the relevant law.

Fines of Dh500 per member can be issued for each month the cover is not in place and visas cannot be renewed or new ones issued. The fees can accumulate and additional penalties can be applied to as much as Dh500,000.

I suggest that NF ask his employer to cover the costs of his medical expenses as they have a legal obligation to provide medical insurance. He should not have to bear these costs.

Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with more than 25 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE

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