Debt collection is the process of pursuing an individual in order to get the money they owe to an individual or a company. In this regard a number of services are available in the UAE in the form of Debt collection agencies that cover full debt collection or Lawyers should you need to use the legal route to recover said debts. Rental arrears, bank loans and bounced cheques are examples showing debt collection in use.
The Simple Legal Steps to Debt collection:
- Do Your Homework
Perform a background check for the debtor to ascertain their credibility and honesty within the market. This process could include acquiring a police certificate to check if they have any pending cases or delving into their past business interactions to possibly find ways to retrieve the debt. Try and get as much information as possible in order to make an accurate assessment of the person in question.
- Keep Proper Documentation
The information you gather on the debtor is vital information the debt collector uses to build a case. Evidence showing money owed includes outstanding receipts, written contracts or any other telling forms of information. Many times debt collection procedures have broken down due to very poor record keeping.
- The Security Cheque
In the UAE submitting a security cheque / s as part of the lending process is commonplace. They indicate a higher level of commitment on the part of the debtor and increased assurance to the creditor. Security cheques can be presented to collect a debt upon maturity. A bounced security cheque can be grounds to start legal proceedings. At this point connecting with a debt collection agency opens up a dialogue between debtor and creditor with the aim of recovering the owed money amicably.
- The Amicable Settlement
The Debt Collection Agency or lawyer will use the information and Security cheque (if any) to push for a peaceful, hassle-free settlement of the outstanding debt. In the case of Debt collectors, the process begins with phone calls and possibly emails advising the debtor to settle the matter amicably before they have to escalate the issue to the courts. A lawyer may begin with a legal notice politely telling the debtor to settle the matter out of the courts. Both Debt collection methods operate within the parameters of the law.
- Legal Options
Consider registering a civil or criminal complaint if there is no amicable decision. With this will also come legal costs which you would aim to recuperate by successfully winning against the said debtor.
All You Need to Know About Debt Recovery Procedures in the UAE
Filing a petition with Dubai court to recover your debt would be next. The court will notify the debtor through a registered demand letter to settle the amount with any additional fees within 15 days. Should this fail then a trial will commence conducted in writing. All should be well documented with Arabic translations and appropriate court fees.
The court will assess the information provided. Either party has the right to appeal within 30 days from the date of the judgment before the Court of Appeal.
