Bank debt settlement in the UAE should start with an early review of the facility documents, statements, security and collection correspondence. The available route depends on the type of finance, arrears, guarantees, cheques and whether the debtor is an individual or carries on a business. To review the documents and legal options, call Abdulrahman Alaamri Advocates and Legal Consultants on +971 54 333 0000 or send a short summary through the firm’s WhatsApp.
What is a bank debt settlement?
A settlement is a written agreement between a licensed financial institution and a customer for payment on revised terms. It may involve adjusted instalments, new payment dates, consolidation of identified liabilities or payment of an agreed amount. No single structure fits every account, and an offer should be reviewed for its effect on security, credit reporting and existing proceedings before acceptance.
First steps when repayments fall into arrears
- Collect the facility agreement, statements, payment schedule and amendments.
- Separate principal, interest or profit, fees and arrears.
- Identify cheques, guarantees, mortgages or other security.
- Write to the bank’s arrears or debt-management team.
- Make a realistic proposal supported by income and essential expenses.
- Keep every complaint number, letter, settlement offer and receipt.
The Central Bank of the UAE Consumer Protection Standards require licensed financial institutions to provide credit counselling and give reasonable consideration to alternative arrangements when customers face repayment difficulties.
Restructuring or a revised payment arrangement
Before signing, request a written statement of the balance, term, instalment, interest or profit, charges, payment allocation and the effect on arrears and credit reporting. Where a revised arrangement is agreed, the Standards require a clear written explanation and detailed revised schedule within the applicable regulatory period.
Compare the total cost of the new arrangement with the existing facility. A lower monthly instalment may extend the term or increase the total cost.
Debt collection and communication standards
The Central Bank Standards regulate collection conduct. Contact should be proportionate, the caller should identify the financial institution or authorised agent, and restrictions apply to workplace or home visits, disclosure to unauthorised third parties and contact hours. Keep a record of calls and messages if you believe the rules were not followed.
A complaint about collection conduct does not automatically cancel the debt. The amount and enforceability of the obligation must be considered separately from any complaint about pressure, disclosure or communications.
When can a complaint be filed with Sanadak?
Sanadak’s complaint eligibility page explains the criteria for complaints against licensed financial institutions and insurance companies. The published criteria require an official complaint to the institution or insurer first and a wait of 15 calendar days before escalation to Sanadak. Check the criteria at the time of filing, particularly where an identical complaint exists, court proceedings are underway or the matter was already settled.
The Non-performing Debt Relief Fund
The Fund addresses defined categories of UAE citizens under official conditions and initiatives. It is not a general route for every debt, resident or company. Use official government and bank channels to verify eligibility, and do not send banking information or payments to an unverified intermediary.
Personal insolvency
Federal Decree-Law No. 19 of 2019 Concerning Insolvency provides court procedures for natural persons who do not conduct economic activity as traders. It includes routes for settlement of obligations or liquidation subject to the law. Insolvency is not an automatic debt write-off and should not be pursued before reviewing the debtor’s status, debts, assets, creditors and existing proceedings.
Cheques, mortgages, guarantees and enforcement
- Cheques: review the original cheque, reason for issue and bank return statement. See the firm’s guide to UAE cheque law.
- Mortgages: continuing default may lead to action against secured property under the agreement, law and competent orders.
- Guarantees: read the scope and limits of the guarantee and any demand made against the guarantor.
- Judgment or enforcement file: a settlement after judgment must expressly address the existing file, attachments and security.
Documents for a lawyer review
- Facility or card agreement and amendments.
- Recent statement and payment schedule.
- Breakdown of arrears, fees and interest or profit.
- Earlier restructuring or settlement offers.
- Cheques, mortgages, guarantees and security documents.
- Notices, pleadings, judgments and enforcement file details.
- Evidence of income, essential expenses and other liabilities.
How can a bank debt lawyer help?
A legal review identifies the obligation, accounting, security and current proceedings before deciding whether to request information, negotiate in writing, submit a regulatory complaint, defend proceedings, settle within an enforcement file or assess personal insolvency. A lawyer can also review the settlement wording so that the final amount, payment dates, security, cheques and closure of proceedings are addressed clearly.
Bank debt settlement questions
Can a bank reject a settlement offer?
The institution may assess and accept or reject an offer under its policies and the law. The Standards address the documentation and written communication of reasons when a proposed revised arrangement is rejected in regulated circumstances.
Does filing a complaint stop court or enforcement deadlines?
Do not assume that a complaint suspends a deadline, claim or enforcement action. Confirm the status of the file and any written decision from the competent authority.
Can the parties settle after enforcement starts?
They may agree payment terms, but the agreement should state its effect on the enforcement file, attachment and security, and the required step should be taken before the competent authority.
Book a bank debt legal review
To book a legal consultation in Dubai about a facility, settlement offer or bank correspondence, call +971 54 333 0000 or use the firm’s contact page. The appropriate step is identified after reviewing the agreement, statements, security and any court or enforcement file.
This page provides general information and is not legal advice for a specific matter before the documents and facts are reviewed.
