Dubai: “When an individual takes a bank loan or has outstanding credit card payments and for one reason or another fails to pay the minimum amount, the bank has the right to take legal action against that person,” lawyer Ali Mussabeh Dahi told Gulf News.
Dahi said an arrest warrant may be issued as part of that legal action. “When that person goes to renew his residency visa, the General Directorate of Residency and Foreigners Affairs (GDRFA) has the right to refer him to the police who then apprehend the person, sending him to the police station or prosecution or whichever department he is wanted by.”
However, this does not mean that taking a bank loan threatens residence status.
“The only thing that links the two is the legal case against the individual,” Dahi said, suggesting the defaulter should settle his legal status by either paying up the owed amount or reaching an amicable settlement with the bank to withhold the arrest warrant or place his passport in custody.
“To avoid the visa’s expiration, there is a common practice that could be upheld before the police, prosecution and court,” Dahi said.
“The defaulter has the right to file a special request before the prosecution to have his residency renewed," the lawyer explained.
"The prosecution then sends a representative who meets with the defaulter at the GDRFA. The defaulter then goes through the procedures of renewing his residency in the representative’s presence. After the residency is renewed, the defaulter surrenders his passport to the representative.”
Colonel Mohammad Saeed Al Fishiti, Head of Public Relations at Dubai Police’s Criminal Investigation Department, said the police will file a criminal case for the bank against the defaulter only in cases which involve cheques.
“If there is no cheque involved or if the cheque is a guarantee cheque and it has that written on the back of the cheque, then the bank should file a civil case at the civil court,” he explained.
Col Al Fishti said that when a criminal case is filed for a bounced cheque, the police contact the person and ask him to come in.
“Then we try to solve it amicably. If the person can pay the money, they do, and the case is dropped. If they can’t, we transfer their case to the public prosecution.”
In no case, he said, do the police ask the department of residency and foreigners affairs to cancel a person’s visa.
A GDRFA official told Gulf News that the department does not interfere with residential statuses unless there is an order from the court.
“We do not impede visa renewal procedures unless there are orders from a court or the prosecution. Usually, a residency visa is renewed once an individual has settled a dispute with the accusing party,” the official said, “Also, we only cancel a person’s residency if a court’s final verdict mandates us to do so. We do not directly interfere with any defaulter’s residential status.”
C.N. a manager at a Dubai-based company, said he has seen many of his staff members find themselves in a defaulter’s dilemma.
“I blame both them and the banks,” C.N. said, “We offer banks clear statements detailing just how much our employees earn and how much their potential gratuity payments are. The statements are more than enough to calculate whether or not that person is capable of paying back the loan. Yet, I find that banks dole out a huge sum to people who obviously can’t pay it back.”
C.N. said even if a person can pay the minimum fee, the interest on the remaining amount will accumulate in an overwhelming number.
“Banks give out credit cards carelessly,” he said, “and people seem to accept them just as carelessly. I have an employee who has outstanding debts on five credit cards. Sooner or later, if he can’t pay the minimum amounts to his banks, they will file a case against him which will threaten his stay in the country. After that, all procedures of renewing that person’s residency will be impeded as he will be blacklisted.
“The bank first starts directly trying to contact the person or through his/her sponsor,” he said. “Then the warning letters and notices start coming in. If the person persistently ignores these notices, the bank will be forced to lodge a complaint with the police or prosecution. Once a person is on the blacklist, he finds himself with two options: abscond or pay the dues. If he can’t do either, he’ll be faced with jail time and his visa status will be at risk. It’s a really simple formula with a simple moral: don’t take loans you can’t pay back.”
With inputs by Noorhan Barakat, Staff Reporter and Bassam Za’Za’, Legal and Court Correspondent