Tag: Debt Collection

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Dubai Debt Collection Services | Payment Recovery Lawyers

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Dubai Debt Collection Service | Debt Collection Lawyers

The debt system dates back to the barter system wherein goods were exchanged for goods till it was replaced by currency. Debt collection is the process of collecting overdue debts owed by the individuals as well as by the companies who have incurred debts. As per the UAE law limitation for filing a legal action for debt recovery is between 2-10 years.

What is the debt collection procedure in Dubai?

Extra-Judicial Process To Recover Debts

UAE debt collection lawyers assists in collecting the debts outside the court. This collection service collects all the information about the debtor and then contact the debtor on behalf of the lender in a very professional manner to remind the debtor about his unpaid debt. This is done mainly via telephone or email. This way they inform and educate the debtor about possible legal consequences of non-payment of debts.

If amicable settlement can’t be reached between the parties, a petition can be filed with Dubai Court. As a first step the Dubai Court will notify the debtor through a registered demand letter which requires him to pay the amount and the late fees within fifteen days. If the debtor does not pay the debt the lawyer will prepare the documents, court memos to be filed before the civil court along with the supportive documents, emails and correspondence that prove creditor is entitled for the outstanding amount. The lawyer will then pursue the hearings and will execute the judgement.

Court Procedure To Recover Debts

When the extra-judicial method to recover debts fails then the only option is to resort to court intervention. To protect the Emiratis and residents who are facing financial troubles to restructure their debt with the possibility of receiving “new concessional loans” Law No. 19 of 2019 was passed. This law gives two options to resolve financial bankruptcy:

Financial Obligations Settlement

The court shall appoint one or more specialists to help the debtor throughout the process and design a settlement plan for the financial obligations based on circumstances. Once this is done, creditor will vote and it will be implemented. The court has the authority to terminate it if:
The debtor abstains from or intentionally damages or conceals some of their possessions, or if the debtor makes false assertions, or if the debts are not paid for one or more than forty consecutive days after maturity. In such case the debtor may file for bankruptcy.

Insolvency and financial liquidation

The second method to recover debts is to liquidate assets and money to repay the debts. This is done when the debtor can’t pay the amount for more than fifty consecutive working days. When the debtor elect’s liquidation, the court appoints a trustee to assist and supervise the liquidation of the debtors’ finances and assets. This is done according to Article 8 of the new debt legislation. Creditors may also seek the liquidation of a debtor’s money in some situations provide liquidation sum does not exceed 200k. So, basically the law provides for two things—It provides a plan for the settlement of the debts and liquidation of the assets in case the debtor fails to pay the debt.

What is sale of debts?

Debt collection might involve sale of a specific share of debt to another company called as debt buyer. Such companies buy debts for a certain percentage of the debt value and pursue the debtor for full balance. In this case the creditor receives direct revenues but cannot recover full amount because of a percentage shared with the company for share of debt.

What is the procedure for bankruptcy of companies?

When a company no longer pays its debts, it can get a fresh start by liquidating its assets to pay their debts or by creating a repayment plan, bankruptcy laws protect those businesses which are troubled financially and fails pay its debts. The UAE Bankruptcy Law No. 9 of 2016 as amended by Law No 23 of 2019 governs bankruptcy on the federal and local level of UAE and is overseen by Ministry of Finance. It does not apply to DIFC and ADGM and individual merchants. Bankruptcy law provides various different options in order to avoid full bankruptcy. The Bankruptcy Law says following procedure must be adopted in case of bankruptcy o companies:

Preventive Composition

The first step in case of bankruptcy of companies is to give the breathing space to it to reach to any settlement with its creditors when it is in its early stage of financial distress. This option is available when the debtor has not defaulted for more than thirty working days with respect to debts owe to the creditor. Only a debtor can make an application to the court for preventive composition. If the application is accepted, a composition trustee will be appointed by the courts to reschedule the debtors debts and enter into a settlement plan with the debtor’s creditors known as the Preventive Composition Plan. The creditors must vote to approve this plan and this plan must not take more than three years from its implementation. And if this plan is approved by the court and the creditors the trustee will supervise the plan throughout its implementation.

Restructuring Process

When a bankruptcy application is given to the court by an insolvent debtor or by the creditor where the unpaid debt is more than 100,000 AED and has been overdue for thirty days despite a legal notice, process of restructuring starts. Court will appoint a bankruptcy trustee and while preparing the report about the debtors business, it will check if restructure of debtors business is possible. This restructure process will not take more than five years. Once restructure process is approved any civil/criminal proceeding against the debtor is suspended.

Bankruptcy

If the court nullifies the preventive composition or restructuring plan the court will go ahead with formal bankruptcy procedure of the debtor. The court can entitle the debtor to continue his business till formal bankruptcy is declared. In order to recover money, the trustee under the supervision of the courts will start selling the assets of the business to liquidate its assets.

What are the effects of bankruptcy?

When a debtor is declared bankrupt selling of his assets to recover the money shall be done and certain debts and expenses shall have priority. Merchant/ Owner of the business will be prevented from being directly involved in the managing of the business and from applying any further debts. All court proceedings will be suspended including execution proceedings except for those debts which are considered preferential debts. The transactions of the debtor prior to bankruptcy up to two years shall be nullified, set aside and reversed. The people involved in management of the debtor will not have any rights or power to be part of any managerial or board position for five years after the bankruptcy procedure is over.

Even after the procedure of bankruptcy is over and liquidation of debtor’s assets, every creditor whose debt was accepted but not repaid in full may execute against the debtors’ assets to recover the outstanding amount.

How much does the debt collection service charge?

Debt collection in Dubai vary greatly in how they charge for the services. Usually, they take percentage of the actual debt after collection. So, the average charges are:
Commission Fee: 25% to 50% of debt owed
Admission Fee: 5% to 10% of debt
Other (Risk, Litigation) Additional 15% to 20% of debt owed

How to proceed for debt collection in case of oral agreement?

In a situation no agreement exists between the debtor and the creditor, it is sufficient for the creditor to have invoice and their acknowledgement as a sufficient proof for debt collection.

In conclusion, the Emiratis and Expatriates who are unable to pay their credit card debts or outstanding debts cannot be imprisoned now, the new insolvency law says that they can work to pay off their debts with the help of UAE government. This is a big step considering most of the Expatriates live in Dubai on credit because of high cost of living.

 

 

 

Debt Collection - Al Reyami Advocates Legal Services

Debt Collection In Dubai UAE 2021

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Debt Recovery And Collection In The UAE (No Win, No Fee – Out Of Court)

The United Arab Emirates is a country of amazing opportunities, which consists of approximately of 90% of expats who came to work, live and study in this country, raise and educate their children here, and who are very pleased with their choice thanks to the state policy aimed at harmonious, sustainable development and ensuring security of all who came to the UAE.

However, due to natural circumstances, such as Covid-19 for example, or deliberate illegal actions, organizations and individuals have to face a situation where they cannot receive the money promised to them under the contract or due to them.

Inevitably, they have to face an unpleasant and difficult situation of debt collection, look for ways to get the funds that they owe, as well as compensation and losses that they have suffered because of the delay of promised payments.  This is where our team of legal consultants in Dubai can definitely assist.

Clients of our law firm Hassan Al Reyami & Muhyealdeen International Legal Consultants often turn to us for help in debt collection and over many years of successful work in this area, our team of debt recovery lawyers and experts have been able to accumulate a lot of positive experience in resolving these issues.

Debt Recovery Process

Let’s take a look at the basic stages of debt collection that you have to go through to get a debt, sometimes you have to go through all of them, sometimes we manage to solve the issue at the first stage of collection, depending on the documents provided and the debtor’s ability to pay. They are pretty clear and strong:

  1. Drafting Legal Notice
  2. Mediation
  3. Litigation
  4. Enforcement

In addition, a final stage is – Settlement agreement, which can take place at each stage of debt collection.

Why do I need debt collection lawyers?

In our law practice, we faced with a variety of cases of non-repayment of debt due to different reasons and circumstances, and often the malicious intent of the debtor. The most common situations of non-repayment of debt includes the following:

  • Unpaid Cheques
  • Bounced Cheques
  • Unpaid Invoices
  • Unpaid Salaries
  • Unpaid Loans
  • Unpaid Service Benefits
  • Bad Debts
  • Delinquent Account Receivables
  • Commercial Debts
  • Insurance claims
  • And a lot more

At the first stage, we try to resolve the issue through mediation with the debtor, through negotiations, submission of documents justifying the debt, explaining to the debtor the consequences that non-payment of the debt can lead to, but we also do not forget that our collection case may end up in court, and therefore, we must issue a legal notice to the debtor with an indication of the amount, legal basis and the timing of debt repayment. We also have to take into consideration limitation of time to have a chance to claim the debt.

Quite often in our legal practice, but unfortunately not always, the mediation process leads to resolving the issue of collection in favor of our client.

The best outcome of mediation and negotiations with the debtor on debt collection is the signing of a settlement agreement with him on the repayment of the debt and the release of the relevant documents and the failure to proceed with the process in court proceedings, in which our law firm has accumulated extensive experience, having signed many amicable and settlement agreements and collected debts out of court to deep satisfaction of our customers.

If it is impossible to resolve the issue by an amicable agreement, the client is forced to go to court to resolve the issue of debt collection. Over the years of its more than twenty years of legal practice, Hassan Al Reyami & Muhyealdeen International Legal Consultants has accumulated vast experience in debt collection in the courts and arbitration of the United Arab Emirates.

Our Dubai lawyers had litigated in over 160 international and over 200 local arbitrations and court cases with an outstanding client satisfaction rating of 98% and completed over 5000 court case and arbitrations in total with high success rate. We have accreditation in all the courts in the United Arab Emirates and have local advocates in our team, which can present our clients before local courts.

A debt collection case won in the court is not a guarantee that you will receive your debt. A very important and difficult stage is the collection process, which includes investigating the property, accounts and assets of the debtor. Therefore, in the process of debt collection, it is necessary to legally competently provide that the debtor could not withdraw or hide his assets, thereby depriving you of the possibility of collection.

Why we recommend contacting debt collection specialists

The main reason for the failure of the collection of the tax is that the client is often not familiar with the laws of the UAE or does not understand them well, cannot properly draw up his claim, is in a stressful state, has chosen the wrong strategy for collecting a debt, and sometimes he simply cannot agree or talk in the same language as the debtor or his lawyers. For the creditors is also very important to come into contact with debtors as soon as possible, because he can have another creditors and because of that, there could be a lag behind other creditors demanding payments.

Regardless of the complexity of your debt collection case, Hassan Al Reyami & Muhyealdeen International Legal Consultants can assist you in debt collection in United Arab Emirates, and our legal practice covers all seven Emirates in United Arab Emirates. No win – no fee (out of court settlement), this is the guarantee of our work for you.

 

 

 

bounced cheque in dubai uae

REGULATIONS FOR BOUNCE CHEQUES UNDER UAE LAW (2020)

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BOUNCED CHEQUES LAW IN UAE | CHEQUES REGULATIONS IN UAE | BOUNCED CHEQUE CASE IN DUBAI UAE

A common predicament faced in the business realm is the risk of possessing dishonored cheques. For this reason, in order to protect and provide remedy against this act, UAE Federal Penal Code imposed criminal sanctions on those persons drawing bounced cheques. On Article 401 of Federal Law No. 3 of 1987 imposes penalty by way of fine or imprisonment – for an amount of not less that AED 1,000 and not more than AED 300,000 imprisonment of not less than one more and not more than three years may be decreed by the court, as the case may be.

Therefore, it is always been resorted to and have been a practical legal means for creditors to file a criminal complaint for the bounced cheque along with a civil case for debt recovery of the amount disputed for collection. And since it has been a common practice, this criminal courts dockets are heavily congested and clogged as a result. And in order to ease and strive to reduce the burden from police, public prosecutors and criminal courts and to tighten the gravity of the penalties in low value claims, UAE legislators have introduced and amended the provisions of the bounce cheque laws providing a speedy resolution by introducing “ONE DAY COURT” and revised the circumstances on the imprisonment aspect of bounced cheque.

ONE DAY COURT – this new system allows resolution of minor bounced cheque cases to be determined and decision to be issued within 24 hours.  This is an effective way of facilitating UAE judicial system for speedy determination of minor cases and to strengthen laws of UAE for misdemeanor. Courts in the Emirates of ABU DHABI, DUBAI and RAS AL KHAIMA have been established successfully resolving minor bounced cheque cases.

On the other hand, the new law allows the criminal courts to impose only fine on simple crimes without imprisonment. To challenge the order of the court, objections may be filed within 7 days and this matter will be dealt with by the criminal court in the normal procedures as applicable. “SIMPLE CRIME” is categorized as per the cheque value of AED 200,000 or less and a fine of not exceeding AED 5,000 to AED 10,000 will be imposed. Cases for the aforesaid cheque value can be sentence by the Dubai Public Prosecution directly without any need of court procedure, however, the imposition shall be for a fine only and cannot exceed AED 5,000 to AED 10,000 as the case may be.

If you are looking to recover value of a bounced cheque with the help of debt collection lawyers? Our team of AL REYAMI ADVOCATES & MUHYEALDEEN INTERNATIONAL LEGAL CONSULTANTS can help you deal with all the cases concerning bounced cheques.

Bounced Cheque Law Dubai UAE

Bounced Cheque in Dubai UAE – What you need to know

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Rules and Regulations of Bounced Cheque Law in Dubai UAE.

Bank cheque is a tool used by individuals to secure funds, contract business and pay obligations, but not all of them have the ability to fund these cheques and the volume of bounced cheque cases have sky-rocketed over the years.

To address this ever-growing state of affairs, the UAE Government has established a set of rules to guide both the issuer and the recipient of Bounced Cheque.

There are several UAE Laws that can be utilized to protect the recipient of Bounced Cheque and they can be done either in the criminal or civil court. The recipient can file a complaint in the police station against the issuer and the case will be forwarded to the public prosecution and then to the criminal court (under the new rules, the public prosecution, in an effort to adjust with the volume of cases with low-value claims, can now issue criminal orders to sentence offenders of low-value bounced cheque to pay fines rather than endure jail time).

According to a recent study, the UAE Public Prosecution categorized low-value cases like the ones where the bounced cheque amounts less than AED 200,000 hence the only issuer of cheques with an amount more than AED 200,000 are doomed to be sentenced with a jail term.

The recipient can also institute a civil action against the issuer for the amount of the bounced cheque and if the issuer cannot pay the amount, he can be imprisoned for a period corresponding to the unpaid amount.

As for the issuers, particularly for low-value cheques, they can avoid imprisonment by simply paying the fine corresponding to the cheque amount; however, this does not absolve them from paying the obligation when the recipient opted to institute a civil action to collect the amount due through a debt collection service.

For more detailed discussion of the intricacies of the Bounced Cheque Law in the UAE, you may contact Al Reyami Advocates and Muhyealdeen International Legal Consultants.

 

bounce cheque law in dubai

Bounced Cheque in UAE

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“I received a bounced cheque in UAE.  What do I do?”

A bounced cheque in UAE is considered a crime and as per the rules, instead of jail term there will be fines issued considering bounced cheque as a misdemeanor on the following basis,

– There is no date mentioned
– It is not signed by the drawer
– Does not clearly state the word “cheque”
– Does not specify the amount issued
– If it does not mention drawer and the beneficiary name

The new rule states that a bounced cheque of upto 50,000 will be given a fine of aed 2,000, for cheque between 50,000 to 100,000 will be given a fine of aed 5,000 and lastly for cheque between 100,000 to 200,000 will be given aed 10,000 fine.

A postdated cheque is not considered a crime. However, the cheque will be invalid if the date is not incorporated on the cheque or it contains fake duplicate signature or any sort of mark.

Please note that a bounced cheque crime may not be intentional but still the offence takes place once the cheque has been presented.

If you have received a bounced cheque and want to have your investment back, our debt collection lawyers are available to assist you in recovering your funds/assets.