Debt recovery is a common process in various parts of the world, including the United Arab Emirates Laws and legislation play an important role in regulating this process, and ensuring that it proceeds fairly and effectively, protecting the rights of both the creditor and the debtor.

Legislation and legal provisions:

Debt recovery process in the United Arab Emirates is regulated by a set of laws and legislation, including:

  • Federal Law No. 5/1985, as amended by Federal Decree-Law No. 30 of 2020 regarding civil transactions: pursuant to which this law regulates the general provisions of contracts and obligations, including debt provisions.
  • Federal Law No. 19/2019 regarding insolvency and reorganization: This law regulates the insolvency procedures of individuals who are unable to pay their debts.
  • Federal Law No. 51/2023 regarding financial reorganization and bankruptcy: This law regulates the procedures for declaring bankruptcy of companies.
  • Federal Law No. 14/2020 on Civil Provisions: This law regulates family and personal status provisions, including provisions on debts between family members.
  • Ministerial regulations and decisions issued by the competent authorities: The competent authorities, such as the Ministry of Justice and the Central Bank, issue regulations and decisions that complement the provisions of the above-mentioned laws and regulate the details of the debt recovery process.

Debts are generally classified into three main types:

  • Bank debts: These are debts owed by the borrower to banks, including loans, credit facilities, and credit cards.
  • Commercial debts: These are debts owed by the borrower to merchants and suppliers, including cheques, bills of exchange, and invoices.
  • Personal debts: These are debts owed by the borrower to other individuals, including consumer loans and personal loans.

Debts are usually proven by a set of documents

  • Contracts and agreements: These documents prove the terms and conditions of the debt, such as the amount of the debt, its due date, and the interest rate.
  • Bonds: Bonds are documents that prove the existence of a debt owed by the borrower to the creditor.
  • Cheques and bills of exchange: Cheques and bills of exchange are documented payment instruments used to repay debts.
  • Invoices: Invoices prove the amounts of debts owed by the borrower to merchants and suppliers.

Legal and administrative procedures:

  • Filing a lawsuit: The creditor can file a lawsuit against the debtor to demand payment of the debt.
  • Requesting a precautionary seizure order: The creditor can request a precautionary seizure order on the debtor’s assets to prevent him from disposing of them.
  • Requesting a bankruptcy declaration of the debtor: The creditor can request a bankruptcy declaration of the debtor if it is proven that he is unable to pay his debts.

Negotiation and friendly means:

  • Communicating with the debtor: The creditor can communicate directly with the debtor to try to reach an amicable solution to repay the debt.
  • Using a mediator: The creditor can use a neutral mediator to help reach an amicable solution to repay the debt.
  • Rescheduling the debt: The creditor can reschedule the debt with the debtor, by changing its terms and conditions, such as paying the debt in installments or reducing the interest.

Resorting to the judiciary and the litigation mechanism:

  • Competent courts: Debt recovery cases are heard in civil or commercial courts, depending on the type of debt.
  • Creditor rights and obligations:
  • The right to recover the debt: The creditor has the right to recover the debt from the debtor.
  • The right to obtain interest: The creditor can obtain interest on the overdue debt.
  • The right to take legal action: The creditor can take legal action to recover his debts.

Debtor’s rights and obligations:

  • The right to repay the debt: The debtor has the right to repay the debt.
  • The right to obtain payment facilities: The debtor can obtain payment facilities, such as paying the debt in installments or reducing interest.
  • The right to defend himself: The debtor can defend himself in a debt recovery lawsuit.

Guarantees and legal protection for both parties

The laws of the United Arab Emirates provide a set of guarantees and legal protection for both the creditor and the debtor, including:

  • Creditor guarantees:
  • Seizure of the debtor’s funds: The creditor can request the seizure of the debtor’s funds to prevent him from disposing of them.
  • Mortgage of the debtor’s property: The creditor can mortgage the debtor’s property as a guarantee for the repayment of the debt.
  • Declaring the debtor’s bankruptcy: The creditor can request declaring the debtor’s bankruptcy if he is proven unable to pay his debts.

Debtor protection:

  • Minimum wage: The creditor is prohibited from seizing the debtor’s minimum wage.
  • Exemption of some funds from seizure: Some funds are exempt from seizure, such as the debtor’s clothing and personal items.
  • Right to reorganize: The defaulting debtor can get the opportunity to reorganize his debts and avoid bankruptcy.

Finally, it has become clear that the process of debt recovery in the UAE requires extensive legal expertise and in-depth knowledge of the laws and procedures related to it, You can rely on our experience spanning over 25 years in the field of debt recovery, which has enabled us to achieve a success rate of more than 95% in the various cases we have handled Our team consists of an elite group of lawyers specialized in debt cases, who have superior skills in drafting contracts and legal pleadings, and communicating effectively with various competent authorities.

We provide our valued clients with a comprehensive package of legal services related to debt recovery, including:

  • Providing legal advice on the best ways to recover debts.
  • Helping clients in fulfilling all legal procedures requirements.
  • Representing clients at all stages of litigation before the courts.
  • Negotiating with debtors to reach amicable solutions to repay debts.
  • Taking the necessary legal measures to collect debts, such as seizing debtors’ funds or mortgaging their properties.
  • Regularly following up on the progress of lawsuits and informing clients of developments.
  • Providing legal support to clients during the stages of debt recovery. Do not hesitate to contact us for a free consultation about our services, and be completely confident that we will be by your side every step of the way to recover your financial rights.