What happens if you leave the UAE without paying off debt?

Owning a bank loan for a long time is not ideal as you might end up repaying the amount which is higher than the principal amount that you initially borrowed. This is due to the high interest rates that make the total repayment amount higher for the borrower.

Having a credit card in Dubai is not uncommon. It becomes easier for you to make a cashless purchase and also helps to maintain a healthy credit score. But you must use it sensibly by paying bills on time and not getting trapped in debt.

Efficient planning to clear your debts is crucial, whether it is banks, financial institutions, government agencies, or service providers. Irrespective of the amount you borrowed, you need to handle your debt in one way or another to pay it off efficiently before it gets out of control.

In the UAE, when a borrower is granted a bank loan or a credit card facility, the respective banks or financial institutions collect cheques as protection against the sum of the loan. These cheques are in addition to the bank agreement or application form defining the terms and conditions.

If you fail to pay three consecutive installments or six non-consecutive installments of the monthly repayment of your loan or credit card, it may be regarded as a case of default in Dubai (UAE). The bank or financial institution from which you have taken loans or credit cards can deposit your security cheques for recovery in the event of a default. Then, the lending bank or financial institution can file a criminal or civil case against you if these security cheques are dishonored due to insufficient funds in your bank account.

In the UAE, dishonor of cheque is treated as a criminal offense. As per the Federal Law, detention or a fine shall be levied on any person if,

  • The person gives a cheque without an appropriate balance to be drawn.
  • The person, after giving the cheque, withdraws part or all balance, rendering the balance insufficient to settle the cheque.
  • The person instructs the drawee not to cash the cheque or signs the cheque in such a way that it cannot be cashed.

If you leave the UAE without clearing your debt, a criminal complaint can be filed against you. This may lead to severe consequences. Irrespective of whether you are in the UAE or outside, you may face a tough time if you fail to clear your dues. Let’s discuss some of the adverse situations you may face.

The creditors

The creditors or the debt collection agencies will try all means to contact you. They might start chasing you at your residence and office to collect the payment. Depending on how you interact with them, they will try to convince you either in a friendly way or in a harsh way. The best way to avoid this situation is to discuss the terms with the respective bank or financial institution.


A penalty can be imposed on you. The amount of penalty will depend on the repayment cheque amount. If a travel ban is already imposed on you, it may be lifted once you clear the penalty.

Police case

In the event of default payment, first, the lending financial institution will try to recover the amount by depositing the security cheque. If your cheque bounces, they will register a police case against you. You will be under constant watch by the police authorities, especially if you are in the UAE and attempt to escape the country.

Travel ban

If you default on the repayment of loans or bills, a criminal case can be filed against you resulting in a travel ban. As Immigration services and police departments are integrated, you will not be permitted to travel outside the UAE.

You can be arrested when you re-enter the country, in case you default on payments after leaving the UAE.

Effect on credit score

Failing to clear the debt severely impacts your credit score.  Most of the financial institutions may not provide you a loan due to your poor credit score. You might also be barred from applying for any other credit facilities either from banks or financial institutions.

Steps to take if you are a loan defaulter and wish to re-enter the UAE

If you have left the country and failed to clear off your debt, you can still re-enter by taking certain measures. Few steps you can take are:

Authorize a representative

You need someone to represent you in the UAE when you’re not present in the country. Appoint someone trustworthy to deal with the financial institutions on your behalf. You may either give a power of attorney or a clear letter of authorization which may be accepted by banks.

Negotiate the repayment terms

Next, you need to discuss the debt settlement terms with the bank. If you are really serious about clearing the outstanding, most of the time banks offer waivers on your repayment amount. Discuss the best repayment amount which is acceptable to you.

You can hire a professional lawyer who can negotiate with the bank on your behalf. However, it is mandatory to hire a lawyer only, a non-lawyer may not be competent enough to deal with such a situation.

Get it in writing

Once the negotiated terms are finalized, make sure to get it in writing from the bank. It would be ideal to have it on the bank’s letterhead with a stamp on it. It acts as proof in case the bank or the financial institution demands the full amount to be paid.

The written communication is also helpful in cases where the person with whom you negotiated the terms is no more employed with the bank or has been transferred. In case the new official asks for the full amount and not the negotiated one, you will have sufficient proof to provide.

Get clearance certificates

When you have paid the debt and closed the account with your lender, get a no-dues certificate from the bank stating that you have settled the full balance. You can also ask them to submit a certificate to the police authority stating that you have paid the debt. This is done to clear the police case against you.

You must also seek a confirmation letter from the police authorities to clear up any case registered against you. Once the bank notifies the police, they will dismiss the complaint against you. However, insist on a written statement from the police authority verifying the same. At times, you might have to contact the embassy and follow certain guidelines to obtain a police clearance certificate.

Freedom to re-enter the UAE

Once you have cleared all the outstanding debt and obtained all the clearance certificates, you are free to re-enter the country without any hassle. Your return to the UAE will be pleasant and easy. You may no longer worry about the lenders, banks, financial institutions, or police authorities bothering you.

Bottom Line

You might have to leave the country for various reasons. It can be personal, job uncertainty, economic slowdown, etc. Whatever may be the reason, if you are considering leaving Dubai, when you have outstanding debt, it may turn out to be daunting.

The Covid-19 crisis has affected one and all. With the loss in jobs, low pay, and reduced business earnings, many employees and business owners suffered from the financial fallout. Unwillingly, some of them have to leave the country too. But if you have not cleared your loans or bills, exiting the country might not be favorable.

In the past, there have been cases where many expatriates have left the country without repaying their debts. Even though you are not in Dubai, you will still remain a debtor both for banks and the UAE government. However, if you repay your existing debt to the respective financial institution, arrangements can be made for you to re-enter the country in a convenient way. For further clarity and assistance, you may take legal help on the matter.

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