Settling Debts - Advice for Expats Exiting the UAE

Have you been living in the UAE for a long time now and planning to move to your home country soon? Moving back is surely not an easy task, especially if you have any debts or unpaid dues. Understanding the steps to manage these financial obligations is crucial. From grasping the legal aspects to exploring viable solutions, you must strategize effectively. Here you will get practical insights on handling pending loans while preparing to move back to your home country from the UAE. By outlining essential considerations and actionable advice, we aim to assist expatriates in making informed decisions and managing their financial responsibilities smoothly during this transition.

Watch Out: What Banks Consider When Settling Bad Debts?

The primary and most important aspect banks and lending institutions look into is your payment capacity. It fundamentally means that your ability to repay the existing due is highly taken into consideration. On top of that, bank authorities also look into the current financial situation. In fact, they compare the present situation with the time when the loan was taken.

Additional considerations to be taken into account during negotiations consist of your current remuneration, potential inclusion of a co-borrower or guarantor, track record pertaining to bounced cheques, existing domicile, assets held within the UAE and/or country of origin, familial maintenance requirements,– whether situated in the UAE or an alternative location, as well as age and health demographics.

From a legal standpoint, your attorney will verify whether the lending institution adhered to the regulations stipulated by the UAE Central Bank while disbursing your loans. Questions regarding whether the institution extended a loan beyond your financial capacity will be among those assessed.

Do Insurance Companies Pay Off Loans In Case of Job Loss?

Many often have the misconception that insurance companies provide compensation for loan repayments in case a situation like employment loss happens. However, in the UAE, it's important to note that if the insurance company pays for your loan, they'll actually ensure the financial institution can still collect the amount from you.

Insurance companies typically cover only the minimum due for a set period and don't consider terminations or resignations as part of their coverage according to the law.

Repayment of Loans Post Return

It is advisable to explore various options available, such as one-time settlements or extended payment arrangements, considering one's ability to repay.

Banks prioritize efficient strategic repayment plans to facilitate their customers’ journey toward becoming debt-free. They demonstrate considerable support in comprehending challenges faced by the customers, particularly stemming from unexpected medical expenses, job instability, and similar issues.

Active participation in a repayment plan aids in settling debts, with potential legal and financial implications. Debtors should recognize that banks operate within legal frameworks, where the judiciary ultimately determines the outcome.

By: Mousree Das