What happens next if you leave Dubai – and your debts – behind? Time Out investigates
Picture the scene: you’ve just lost your job and you can’t find another one. You have a loan for your car, another for school fees, and one more for your year’s rent. Or you might have a much bigger mortgage for a property that is now in negative equity. What do you do?
Some people have concluded that their only option is to cut their losses, book a flight, accept that they are never coming back and leave without paying the debts. But is that the end of the story or the start of a much bigger problem?
Calum McClure is managing partner for Decol Debt Collections, a company with associated credit offices in 105 countries. Not surprisingly, business is booming. ‘The phone is red hot, it’s on a scale like never before,’ he says. ‘When you think about the amount of credit cards, personal loans, mortgages and auto loans out there, what we’re seeing now is just the tip of the iceberg. When you get house prices dropping by up to 50 per cent, who is going to cover that?’
He says new tools will be introduced that will make it far easier to trace individuals overseas. And with more and more money at stake, it won’t be a case of debtors ignoring a few toothless warning letters. ‘You’ll be on record and the laws of that country will be applied in order to reclaim the money,’ says McClure. ‘In some countries like Jordan, for example, you go to jail till you can pay, so you are really in trouble. But I will send that notice everywhere. German law doesn’t let you get away with anything. And if I need to find you, you’ll be found, unless you’ve got an awful lot of money and get plastic surgery in Brazil. I’ll hire private investigators. It’ll be a skeleton in your closet for the rest of your life.’
To avoid the worst, McClure suggests that people talk to their bank in advance. ‘Ultimately they would like their money back,’ he says, ‘so I suggest you talk about rescheduling your payment plan.’
Unfortunately that doesn’t always prove to be a simple procedure. Steven, an architect from the UK, moved to Dubai last October. He joined a respectable company where business seemed to be booming, but literally two weeks later, everything changed. ‘They shed about 20 per cent of their workforce overnight and I had to go as I was still on probation,’ he says.
It was the start of a night- mare that is still not resolved. ‘The week before I was made redundant, I took out a loan to cover a year’s rent on an apartment. My employers were obliged to tell the bank that I no longer worked for them, which they duly did. I went to see the bank to reassure them that I could make the first couple of payments while I looked for a job and they said that was fine and to keep them posted. Then the next day they froze my bank account without telling me.’
To make matters worse, the bank told Stephen he wasn’t allowed to leave the country for Christmas unless he had a guarantor in place for his loan – something which he said he would never expect a friend to do. ‘It was actually quite frightening – one minute I was treated like a valued customer, then suddenly I was made to feel like a criminal,’ he says. ‘You would imagine that as long as I could pay my instalments it would be OK. I told them that I had enough money to pay in January and February and that my partner would pay from then on when she arrived here, but they weren’t interested. You tell them, “I can’t eat, I can’t get to job interviews,” and they’re not interested.’
Steven’s situation hasn’t yet been resolved, though his partner is now in the country making the payments while he looks for work. His bank account is still frozen, however. ‘I like to think I have a responsible attitude,’ he says. ‘But paying a year’s rent upfront is a disaster waiting to happen. In other countries you have a get-out clause from your contract and all you lose is your deposit; here you have no recourse at all. I imagine that a lot of people will just get out of the country before their bank finds out what has happened to them.
However, Stephen Ballentine, a senior legal consultant for Galadari & Associates, warns against anyone contemplating a swift exit. ‘It’s not just a question of being blacklisted for credit in the future. Someone could commence proceedings in the country where you go and your assets might then be vulnerable.’ And Jim Delkousis, head of litigation and regulatory at DLA Piper Middle East, agrees that the debt-related problems won’t necessarily disappear the moment you board an outbound flight. ‘The question of whether your debts will follow you is a complicated one and certainly one that you should look at very carefully, as well as take advice on. There are circumstances in which they could make life very difficult for you.’
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shobha Nov 07, 2014 05:36 am
I left Dubai due ot some family emergency and when i approached th e bank to clear my credit card bills and close my account they obliged and did so accoring to me. But after 2 yrs of returning i get a call from a collecting agency in India saying i have a pending amount on my credit card. I have no papers on repayment as i had come on emergency. I was ntoable to pay the money as i had lost my hubby by then and havign financial crises. Still i want to clear my debts with a minimal amount how can i do this and be out of ban.
zoir Nov 01, 2014 02:55 am
hi . im a partner in the company and we dont have the bank statement, and our company is not working at the moment, it will be working in 2 months so thats why i am requesting for the loan ,if there is some private lender who can provide loan with high or low interest its ok, i am agree, i can deposit a cheque and passport
Ismat Apr 10, 2012 02:30 am
My name is Ismat and looking to help out my boyfriend in providing him the right information it might sound like a Cliche!!! however this is what had done to him self and seeking answers to his question
My boyfriend had used credit cards of around 10 local banks in uae though due to drecit crunch he recently lost his job the process was slow but finally it took place 4 months back,he is no more in dubai and sadly had to vacate the place in feburary without informing anyone and resides now in New york
What we want to know is he is now missing in dubai for last 2 months is there a chance to return back?
Since he is not able to pay these local banks anymore due to "No-Job" dillema can these bank trace him in Newyork by any chance and bring him back to dubai for any charges?
Any one who can help us we shall be grateful frankly what im suggesting him is not to come back and live his life even if he wanted to pay he needs a job and current market is pothetic ami right in my sugesstion as he dealt with all local bank who might not be able to trace him all the way to new york??
We are looking for a geneuine answer,it is agreed that what he did would be a crime but what should one do when there is no excape plan?? should he die behind bars for the rest of his life??
please reply me in personal at email@example.com it will be great if people with personal experince or advocates can share as it is all about helping a person in need
Thanks a bunch
anonymous Dec 13, 2011 11:44 am
I was on the same boat with Stephen. When I finished my contract in my previous company I decided not to renew my contract since salary is already delayed for 4 months. And I could no longer cope up with my finances. I got my gratuity for working with my previous company and it was in a for of cheque, and it should be deposited in my account in a bank where i got a personal loan and a credit card which is around 65000AED. I deposited my cheque and yes my account was blocked and I could not use my gratuity fee to search for a new job. Luckily, I got a new one and now I only have 15000AED left loan and still paying. Hopefully I will be finishing all my debts by next year and will never entertain any loan or credit forms again here in UAE. NEVER!!!!
Raja Ali Sep 10, 2011 12:09 pm
Hi I'm Ali and due to reasons i had to leave dubai leaving behind a card payment of around 75,000 from 5 diffeernt bank/NBFC....and also a loan of around 24000aed. if i dont pay what can happen????
can the banks do anything? the collection agencies in india already called me few times and it was told to them that i m in dubai!!!
Please advice....as i really dont want to pay !!!!!