It’s been said that at the end of this month, I won’t have a job. I am liable for some things, including bank loans. Will there be a travel ban on me? If so, how does it operate given that at the end of this month I won’t have a job (and thus, a visa)?
It is presumed that you have obtained a personal loan from a lender in the United Arab Emirates in response to your inquiries. Therefore, the provisions of the UAE Federal Decree Law No. 42 of 2022 on Civil Procedures Law, the UAE Federal Decree Law No. 14 of 2020 Amending Certain Provisions of the UAE Federal Law No. 18 of 1993 Concerning the Commercial Transaction Law, and the UAE Central Bank’s Notice No. 3692/2012 pertaining to General Terms & Conditions and Loan Agreements texts drafted and approved by Emirates Bank Association are applicable.
A personal loan made by a lender to a borrower may be governed by the terms of a personal loan agreement format that has been approved by the Central Bank of the UAE in the UAE. When a borrower is approved for a personal loan, the lender may request a check as collateral for the loan’s maximum amount.
A borrower may be in default if they have taken out a personal loan from a lender and have missed three consecutive monthly installments or six consecutive monthly installments that are required for loan repayment.
This complies with Article 4(4) of the Personal Loan Agreement format of the Loan Agreements Formats approved by the Central Bank of the United Arab Emirates, which reads as follows:
In the event that the borrower fails to pay three consecutive installments or six non-consecutive installments of the monthly instalments without the bank’s approval, the loan expires and all installments, interest, and other fees and expenses become due and payable immediately without the need for any notice or court order, without affecting any other rights of the bank under this agreement or under the law.
Therefore, a lender may decide to deposit a borrower’s security check for collection (if any) in the event of a default. According to the terms of Federal Decree Law No. 14 of 2020, if the aforementioned security check is returned for lack of cash, the lender may bring an execution case against the borrower and ask to impose a travel ban. The court may grant the motion and impose a travel ban on a borrower based on the lender’s case.
Alternately, if the unpaid debt exceeds Dh10,000, a lender may contact the appropriate court, which has authority, and ask for the installation of a travel ban on a borrower in accordance with Articles 324 and 325 of the Civil Procedures Law. A lender also has the option of bringing a civil lawsuit or a payment order action against a borrower in court to recoup the unpaid debt. If the borrower loses the case in court, the lender may move forward with filing execution proceedings against them, which may include asking for a travel ban and an arrest order.
It is advised that you continue to make your normal monthly debt installments even after losing your job, in accordance with the aforementioned legal restrictions, as you anticipate having your employment terminated by your employer. This will help you avoid falling behind on your repayment obligations to the lender. As an alternative, if your personal loan is protected by involuntary loss of employment (ILoE) insurance, Once your employer issues a termination letter, you should contact the lender along with a copy of the letter so that the lender can take the necessary steps to collect your monthly repayment installments from the insurance provider up until a specified period as specified in the ILoE insurance policy that you selected when applying for the personal loan.
The amount of your end-of-service benefit provided to your bank account by your current employer may also be applied by your lender to the outstanding personal loan debt once you have been fired by your employer, according to the terms of the personal loan agreement you have with your lender. Because of this, you can also let the lender know that you might lose your job. You can ask the lender to refrain from freezing your bank account in the event that your current job ends, and you can reassure it that you will keep paying the monthly repayment installments on time until you find a new job in the UAE. You might ask the lender to restructure your current personal loan as well.
SOURCE: KHALEEJ TIMES