KHALEEJ TIMES, Wednesday, Jan 25, 2023 | Rajab 3, 1444
Could I be arrested for not paying credit card dues?
Emirates:
Question: As per prevailing rules, can I be arrested for not paying
credit card dues? What’s the penalty for the same if I am unable to?
Response: In the UAE, a credit card facility provided by a lender to a
borrower may fall under the provisions of rules and regulations governing the
terms and conditions of a personal loan. When a credit card facility is granted
to a borrower, a lender may collect cheque(s) as security against the limit of
the credit card.
A holder of a credit card who fails to pay three consecutive monthly bills of
credit card or six non-consecutive bills on the credit card may be considered as
an event of default. This is in accordance with Article 4(4) of the Personal
Loan Agreement format of Loan Agreements Formats Approved by the Central Bank of
UAE.
Therefore, in case of a default, a lender may choose to deposit your security
cheque(s) for collection (if any). If the said security cheques are dishonoured
due to insufficiency of funds, a lender may file an execution case against you
along with a request to impose a travel ban in accordance with provisions of
Federal Decree Law No. 14 of 2020.
Based on the case filed by a lender, the court may approve the request and
impose a travel ban on you. Thereafter, upon completion of 15 days from the date
of notifying you, a lender may commence the relevant execution procedures
against you in court and request to issue an arrest warrant against you.
Further, you can approach a court of competent jurisdiction for voluntary
settlement of your debts with your creditor or commence insolvency proceedings
against you as per the provisions of UAE Insolvency Law which applies to
individuals in the UAE. However, it is at the discretion of the such court to
consider your application for voluntary settlement of debts or commence
insolvency proceedings against you and the lender may still consider filing
criminal and/or civil proceedings against you if the voluntary settlement of
debts or insolvency proceedings against you are not approved by the court.