+97142555496      WhatsApp

All You Need to Know About Debt Recovery Procedures in the UAE

A debt is a financial obligation upon a person or an organization against a received service, product, loan or any other liability that has a value to money. If not fair, it is not bad to have debt unless there is a dispute. Missing a committed payment, a bounced cheque, not returning loans and agreed-on markups in time and unpaid medical or other service bills are those matters that will trigger defaulter status for the debtor. This is when the lender hires a debt collection agent or debt recovery agency to help them get back their debts.

Debt Collection in the UAE

The debt collection UAE laws are not very much sophisticated. It can be very challenging for lenders to do bad debt recovery in Dubai. It is because in the UAE there are no specialized courts for financial litigation and the debt collection lawyer has to represent the case in the civil courts. The global debt recovery index of 2108 also shows UAE among the 3 countries with the worst score for debt collection. The other two accompanying UAE are Malaysia and Saudi Arabia.

Why Debt Collection is a Challenge in UAE?

Dubai debt recovery procedures can be challenging for various reasons. The absence of specialized financial litigation courts leaves it only to the Federal Supreme Court or the Court of Cessation to eventually decide the claims of lenders against the debtor. Both the institutions and their sub-institutions run under civil laws. Along with the local laws, payment practices, and insolvency proceedings are the major factors that make debt collection in UAE a challenge.

What are the ways for debt collection in the UAE?

The UAE law is developing itself towards excellence in implementing commercial laws but getting into legal procedures is not much favored for debt collection. This is not just in UAE but everywhere else, that the lender will look for a way or follow an out of court procedure to recover their debt. This is most of the time swift, quicker, more responsive in terms of debt collection and costs less compared to the costs incurred in a legal process for the same.

Dubai debt recovery services can help the lender to collect their debt out of the court. A professional debt collection agency acquires all the available information related to the debtor. They then in a very professional way reach out to the debtor on behalf of the lender to remind them of their unsettled debts. Such communication is made only through the telephone and the emails. They try to inform the debtor about the possible legal consequences if debts are not paid in time.

  • Keeping it Fair and Legal

It is very important to understand why the lender hires professional services of debt collection agency instead of taking the debtor to the court or personally force them to pay back the debts.  Even though the debtor defaulted to pay their debts, the lender prefers to act professionally for the collection. Therefore, the debt collection agency must also act in a professional way when tracking down the debtor and when approaching them for collection. This is because the debt collectors act as representatives of the lender and any unfair or illegal act by the debt collection agents can also hurt the prestige of the lender.

Collecting debts are not an easy task and require a lot of experience for the debt collection services to recover bad debts on behalf of the lenders in a professional way. There have been many cases where the acts of debt collection agents turned out to be very unfair and instead of resolving the issue, their acts escalated more problems for the lender as well as the debtor.

  • Choosing the best debt collection services is important

An experienced debt collection Dubai agency, like HHS Lawyers & Legal consultants, will first analyze the reasons why the debts turned into bad debts. What were the factors that made the debtor not being able to pay their debts, was debtor able to pay any payments in the past and what has been their payment history? They will also look for the current circumstances of a debtor to figure out what are the possibilities to collect the debt.

The role of debt collection agents should be of a facilitator not only for their client but for the debtor as well. Every debtor is not the same, there will be many people who understand their liabilities towards the lender and striving hard to pay back their debts. It is the circumstances that sometimes are not favorable for them and with a little support they can start paying back. A good debt collector will also act as an arbitrator and mediator between the lender and the debtor to recover the debts. They try to make the terms easier for the debtor to be able to pay back their debts.

  • When the debtor is really dodgy

If the debtor seems careless to respond to the debt collection efforts made by the collection agents or makes commitments and breaches them again to buy more time. Such a debtor is a problem. The debt collection service will have to send them a registered legal demand notice on behalf of the lender to pay back the debts. The debtor on receiving will be liable to pay the original debt with additional fines if any within 15 days. If the debtor fails to do this, then a case will be launched in the court. The court proceeding required debt collection services with the best debt collection attorney to pursue the case as the court proceedings in UAE are done only in writings. The court will decide after the complete analysis of proceedings from both the parties.

Debt Collection UAE – How HHS Lawyers can help you?

Either someone is not returning loan taken from you or you need a bounced check recovery. No matter what sort of debts you need to collect, the HHS Lawyers & Legal consultants have the best debt collection services in Dubai to take care of your debt collection. Their professional and experienced team knows how to handle such cases successfully and with greater responsibility.

Hazim Darwish

Hazim Darwish, is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. Hazim Darwish also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators.