Relocating is a very challenging period for many families when financial debt is in the picture. Without a doubt, it causes intense financial and mental pressure. Especially when individuals take various loans and have multiple credit cards, a constant question in their mind is whether they can leave the country without repaying a loan in the UAE. With the pandemic situation, unexpected relocation is very common. If an individual leaves the UAE with outstanding debts, they need to take extra precautions to keep track of their debt and settle them as soon as possible to avoid any unfavourable effects. Debtors are morally and legally obligated to pay their debt to the lending institution, debt consolidation can be the last alternative they have available to them in times of hardship.
 
Can an individual pay loan in UAE after leaving the country? 
There are still viable solutions when a debtor cannot make payments owing to financial instability. They can contact their respective banks to negotiate a repayment plan. First, it is essential to address the question,  
 
Will having outstanding loans in the UAE prevent an individual from repatriating if they are forced to leave the country and return to their home country due to unforeseen circumstances?
Contrary to popular opinion, attorneys verify that one is not required to pay off all loans when leaving the country. Individuals who wish to return home have options for departing the country while still owing money.
Legally, a borrower is not required to reside in the UAE while their loans are still outstanding. In addition, an individual is entitled to leave the nation if no criminal charges or travel bans have been intituted against them. Therefore, payments can be made while individuals reside outside the UAE.
While the process of owing debt may not end at the border, the consequences of defaulting on such debts after leaving the nation are more severe and stressful than if defaulted while still in the country – and can result in a legal case being filed against the debtor.
Essentially, banks prefer to have clean balance sheets and want their clients to have a good credit history; therefore, it is unlikely that banks will refuse settlements if the debtor has a clear credit history.
 
When settling outstanding debt, what factors do UAE banks consider?
When an individual has difficulty making payments on personal loans, student loans, etc., banks in the UAE consider a list of factors when resolving bad debts.
An individual's ability to repay the loan is often known as "payment capacity", which is the first consideration in a loan settlement. Banks will also evaluate changes in the borrower's personal and financial circumstances since the time the loan was taken out and the borrower's current financial standing.
Other factors that will be considered in the negotiation process include the debtor's current salary, the possibility of having a co-borrower or guarantor, the history of any bounced checks, the assets in the UAE or home country, and the maintenance needs of the family, health, and age.
Banks will also assess payment history, current earning capacity, and other personal situations. All these considerations have a significant impact on the negotiation. 
 
Legal Aspect: Impact when an individual leaves UAE without paying off the debt. 
Basic theory- Failing to pay three consecutive instalments or six non-consecutive instalments on the repayment of your loans or credit card facilities may be considered an event of default.
In UAE, when a personal loan or a credit card facility is granted to a borrower, banks or financial institutions may collect cheques as security against the loan amount. This is in addition to a signed application form that contains terms and conditions. Failing to pay three consecutive instalments or six non-consecutive instalments on the repayment of your loans or credit card facilities may be considered an event of default under Article 4(4) of the Personal Loan Agreement format appended to Notice No. (3692/2012) of the Central Bank of the UAE briefly states that: 
 
Suppose the borrower fails to pay three consecutive instalments or six non-consecutive instalments of the monthly instalments without the bank's approval. In that case, the loan expires, and all instalments, interests, and other fees and expenses become immediately due and payable, without notice or court order, and without prejudice to the bank's other rights under this agreement or under the law.
 
The financial institution or bank has all right to file a criminal complaint against the borrower if these security checks are returned unpaid due to inadequate money in the bank account. It is necessary to understand that dishonouring a cheque is a criminal offence in the United Arab Emirates. This is under Article 401 of Federal Law No. (3) of 1987 on issuing the Penal Code of the United Arab Emirates. 
 
One may be subject to a travel ban upon filing a criminal complaint. If the individual fails to repay the personal loans or credit card instalments, he/she may not be permitted to travel beyond the UAE. If one fails to make payments after leaving the UAE, they may be imprisoned upon return. However, if the value of the security cheque is less than Dh200,000, the penalty might range from Dh2,000 to Dh10,000. A travel restriction imposed due to a bounced check may be revoked upon payment of this fine.
 
In addition, the lending bank may initiate a legal suit against the individual to recover the unpaid amount, depending on the personal loan agreement signed. If the debtor is outside UAE, the bank may submit a petition with the court to have the debtor/borrower to be detained upon return. It is advised to seek a legal expert in the UAE to avoid undesired repercussions in such circumstances.

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