UAE: Can Banks Legally Pursue Customers for Unpaid Credit Card Dues?

UAE: Legal Options for Those Unable to Pay Credit Card Bills

In the UAE, individuals struggling to pay off credit card bills have several legal options, but they must be aware of the potential consequences of defaulting on payments.

Credit card facilities are governed by the same rules and regulations as personal loans, meaning lenders can take significant action if payments are not made.

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Failure to pay three consecutive monthly bills, or six non-consecutive monthly bills, may trigger an “event of default.”

According to Article 4(4) of the Personal Loan Agreement format from the Central Bank of the UAE, this default can lead to immediate demands for full repayment without prior notification or court ruling.

If you default, a lender may choose to deposit any security cheques collected at the time of the credit card issuance. Should these cheques bounce due to insufficient funds, the lender may initiate legal action, potentially filing an execution case against you.

Moreover, if the outstanding amount exceeds Dh10,000, the lender can request a travel ban as stipulated in the Federal Decree Law No. 42 of 2022 on Civil Procedures Law.

They may also pursue civil cases to recover debts, which could result in further legal repercussions, including arrest warrants.

For those in dire situations, it is advisable to contact the issuing bank to discuss possible payment plans or relief options, such as settling dues in installments or waiving penalties.

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While the bank has the discretion to accept or reject these requests, approaching them proactively may prevent further legal complications.

Individuals may also consider declaring insolvency under the UAE Insolvency Law, which applies to residents facing financial difficulties.

For more information, legal advice, or assistance, individuals can reach out to Ashish Mehta & Associates, a law firm specializing in various legal areas, including debt recovery.

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