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What happens next if you leave Dubai – and your debts – behind? Time Out investigates Discuss this article

Picture the scene: you’ve just lost your job and you can’t find another one. You have a loan for your car, another for school fees, and one more for your year’s rent. Or you might have a much bigger mortgage for a property that is now in negative equity. What do you do?
Some people have concluded that their only option is to cut their losses, book a flight, accept that they are never coming back and leave without paying the debts. But is that the end of the story or the start of a much bigger problem?


Calum McClure is managing partner for Decol Debt Collections, a company with associated credit offices in 105 countries. Not surprisingly, business is booming. ‘The phone is red hot, it’s on a scale like never before,’ he says. ‘When you think about the amount of credit cards, personal loans, mortgages and auto loans out there, what we’re seeing now is just the tip of the iceberg. When you get house prices dropping by up to 50 per cent, who is going to cover that?’
He says new tools will be introduced that will make it far easier to trace individuals overseas. And with more and more money at stake, it won’t be a case of debtors ignoring a few toothless warning letters. ‘You’ll be on record and the laws of that country will be applied in order to reclaim the money,’ says McClure. ‘In some countries like Jordan, for example, you go to jail till you can pay, so you are really in trouble. But I will send that notice everywhere. German law doesn’t let you get away with anything. And if I need to find you, you’ll be found, unless you’ve got an awful lot of money and get plastic surgery in Brazil. I’ll hire private investigators. It’ll be a skeleton in your closet for the rest of your life.’
To avoid the worst, McClure suggests that people talk to their bank in advance. ‘Ultimately they would like their money back,’ he says, ‘so I suggest you talk about rescheduling your payment plan.’
Unfortunately that doesn’t always prove to be a simple procedure. Steven, an architect from the UK, moved to Dubai last October. He joined a respectable company where business seemed to be booming, but literally two weeks later, everything changed. ‘They shed about 20 per cent of their workforce overnight and I had to go as I was still on probation,’ he says.
It was the start of a night- mare that is still not resolved. ‘The week before I was made redundant, I took out a loan to cover a year’s rent on an apartment. My employers were obliged to tell the bank that I no longer worked for them, which they duly did. I went to see the bank to reassure them that I could make the first couple of payments while I looked for a job and they said that was fine and to keep them posted. Then the next day they froze my bank account without telling me.’
To make matters worse, the bank told Stephen he wasn’t allowed to leave the country for Christmas unless he had a guarantor in place for his loan – something which he said he would never expect a friend to do. ‘It was actually quite frightening – one minute I was treated like a valued customer, then suddenly I was made to feel like a criminal,’ he says. ‘You would imagine that as long as I could pay my instalments it would be OK. I told them that I had enough money to pay in January and February and that my partner would pay from then on when she arrived here, but they weren’t interested. You tell them, “I can’t eat, I can’t get to job interviews,” and they’re not interested.’
Steven’s situation hasn’t yet been resolved, though his partner is now in the country making the payments while he looks for work. His bank account is still frozen, however. ‘I like to think I have a responsible attitude,’ he says. ‘But paying a year’s rent upfront is a disaster waiting to happen. In other countries you have a get-out clause from your contract and all you lose is your deposit; here you have no recourse at all. I imagine that a lot of people will just get out of the country before their bank finds out what has happened to them.
However, Stephen Ballentine, a senior legal consultant for Galadari & Associates, warns against anyone contemplating a swift exit. ‘It’s not just a question of being blacklisted for credit in the future. Someone could commence proceedings in the country where you go and your assets might then be vulnerable.’ And Jim Delkousis, head of litigation and regulatory at DLA Piper Middle East, agrees that the debt-related problems won’t necessarily disappear the moment you board an outbound flight. ‘The question of whether your debts will follow you is a complicated one and certainly one that you should look at very carefully, as well as take advice on. There are circumstances in which they could make life very difficult for you.’

Time Out Dubai 9 February 2009

There is a threshold figure, whereby the authorities will only come after you if you exceed that amount.

But none of my friends in banking will tell me what that fugure is!

Del wrote:There is a threshold figure, whereby the authorities will only come after you if you exceed that amount.

But none of my friends in banking will tell me what that fugure is!

I was really wondering how much that amount would be, not that I am contemplating a split but it is a much talked about point.

I heard its 150000K is the threshold...

but I can't confirm this

quatroporte wrote:I heard its 150000K is the threshold...

but I can't confirm this

150 Million??????????????? Are you serious? I doubt any ordinary expat will have that kind of debt?

K-Dog wrote:

quatroporte wrote:I heard its 150000K is the threshold...

but I can't confirm this

150 Million??????????????? Are you serious? I doubt any ordinary expat will have that kind of debt?

looooooooool soz for my typo... i meant 150000 AED not 150000K

its 150000 AED

Most banks are thieves and people like Calum Mclure make their living like scavenging jackels by helping the banks.....

The sad part is many debt collectors take advantage of laws in 3rd world countries by threatening to kill family members of the debtor etc.

I understand that people not paying back loans have to be made accountable. However if a person loses his job and had 50k in the bank, he cant use that 50 k to pay off his 20k outstanding loan as it will be frozen. What sort of robbery is this??

BbRovers is right. Loan recovery agents hire hoodlums who harass you so damn bad - people take the extreme step of committing suicide even.

Who can you run to? You can't go to the authorities coz you're on the run - and this is what they take advantage of. Citibank for example is well known for such rackets in Asia.


But why ask for all this trouble. In the old days - you only bought something if you could afford it from your savings. Now - you can have anything - even if you cannot afford to pay for it in a lifetime. Is it any wonder that fresh graduates in our company roam in Porsches and other high end luxury vehicles?

Housing,vehicle, furniture, electronic loans are something you can do without.

quatroporte wrote:looooooooool soz for my typo... i meant 150000 AED not 150000K

its 150000 AED

That amount would let a lot of people off the hook I would think, at least the car loan or personal loan.

michaeldubai wrote:BbRovers is right. Loan recovery agents hire hoodlums who harass you so damn bad - people take the extreme step of committing suicide even.

Who can you run to? You can't go to the authorities coz you're on the run - and this is what they take advantage of. Citibank for example is well known for such rackets in Asia.


But why ask for all this trouble. In the old days - you only bought something if you could afford it from your savings. Now - you can have anything - even if you cannot afford to pay for it in a lifetime. Is it any wonder that fresh graduates in our company roam in Porsches and other high end luxury vehicles?

Housing,vehicle, furniture, electronic loans are something you can do without.

Exactly. Well said.

michaeldubai wrote:But why ask for all this trouble. In the old days - you only bought something if you could afford it from your savings. Now - you can have anything - even if you cannot afford to pay for it in a lifetime. Is it any wonder that fresh graduates in our company roam in Porsches and other high end luxury vehicles?

Housing,vehicle, furniture, electronic loans are something you can do without.

Those who live on ONLY savings and without any bank loans, credit cards extra are two types... either you are extremely poor banks won't lend you or you are extremely rich so you never need credit from banks.

No... this is not the issue... we all CAN and could afford credit from banks as far we keep our jobs...

the question is, WHY banks don't cooperate when they find out you lost your job????

quatroporte wrote:

michaeldubai wrote:But why ask for all this trouble. In the old days - you only bought something if you could afford it from your savings. Now - you can have anything - even if you cannot afford to pay for it in a lifetime. Is it any wonder that fresh graduates in our company roam in Porsches and other high end luxury vehicles?

Housing,vehicle, furniture, electronic loans are something you can do without.

Those who live on ONLY savings and without any bank loans, credit cards extra are two types... either you are extremely poor banks won't lend you or you are extremely rich so you never need credit from banks.

No... this is not the issue... we all CAN and could afford credit from banks as far we keep our jobs...

the question is, WHY banks don't cooperate when they find out you lost your job????

The problem is here with the laws as they have been set up, as you may know when you take out a loan you have to give an undated blank cheque this of course will allow the bank to submit the cheque if you default, bouncing a cheque is a criminal offense here. Believe me the BANKS are not interested to talk under such circumstances, which of course is wrong, if you are behind bars how can you pay?

When I came here and gave the bank a NOC from work they gave me credit cards with 105K combined limit. No credit history, 1 months work history, no questions asked. I didn't get a loan, but lots of colleagues did for sometimes twice that.

So you can walk into the country and get 300K in the hole without the bank even asking how long you plan to stay. The credit crisis around the world is to be blamed equally on stupid/greedy people and stupid/greedy banks in my option.

BTW sage & onion, I didn't have to give a blank cheque when I got a bank account here. Is that the norm? The problem for me was that I didn't have a cheque book from Australia (nobody uses cheques there anymore) so I had to quickly get one here so I could pay the (stupid) year's rent.

Captain Australia wrote:BTW sage & onion, I didn't have to give a blank cheque when I got a bank account here. Is that the norm?

It's a norm. S.Onion said about the blanck cheque only in case of a loan.
Probably I am eather too poor or too rich but I haven't take a loan from my bank only for mentioned reason although they offered me 600K for any spending with out any coverage a year ago...

quatroporte wrote:
Those who live on ONLY savings and without any bank loans, credit cards extra are two types... either you are extremely poor banks won't lend you or you are extremely rich so you never need credit from banks.

Nope. The middle ground is the sensible person who does not live beyond his means. I am single and barely make 10k a month. Been working since in college. I own 3 used cars. I OWN a studio flat bought with cash. Never took a loan in my life.

Do I not enjoy life? Hardly. My one car is a V8 Jeep. The other is a BMW M sports car. And I go out with buddies every other night. I just know how to control my spending.

gtmash wrote:Nope. The middle ground is the sensible person who does not live beyond his means. I am single and barely make 10k a month. Been working since in college. I own 3 used cars. I OWN a studio flat bought with cash. Never took a loan in my life.

Do I not enjoy life? Hardly. My one car is a V8 Jeep. The other is a BMW M sports car. And I go out with buddies every other night. I just know how to control my spending.

I hated your guys. I partied my arse off through college and the first few years of work. Then I heard a few mates say they were putting $20K deposits on houses and stuff. WTF? You mean you partied but kept a little savings also, bastards! ha!

I needed to save money and not party so I though my only option was to move to the middle east to earn cash and not be able to spend it on booze. How wrong I was.

gtmash wrote:

quatroporte wrote:
Those who live on ONLY savings and without any bank loans, credit cards extra are two types... either you are extremely poor banks won't lend you or you are extremely rich so you never need credit from banks.

Nope. The middle ground is the sensible person who does not live beyond his means. I am single and barely make 10k a month. Been working since in college. I own 3 used cars. I OWN a studio flat bought with cash. Never took a loan in my life.

Do I not enjoy life? Hardly. My one car is a V8 Jeep. The other is a BMW M sports car. And I go out with buddies every other night. I just know how to control my spending.

you hardly earn 10K and you own 3 cars and a flat?!?!?!? hmmmm interesting

I dont want to argue with you... but you definitely make no sense... you paid for a flat up front and with your little salary?!?!?!? honestly, have you been saving your salary for the past 10years???!?!

what ever you have done... I respect you...

I wish I could be like you but reality is just painful on this side of my world

quatroporte wrote:

gtmash wrote:

quatroporte wrote:
Those who live on ONLY savings and without any bank loans, credit cards extra are two types... either you are extremely poor banks won't lend you or you are extremely rich so you never need credit from banks.

Nope. The middle ground is the sensible person who does not live beyond his means. I am single and barely make 10k a month. Been working since in college. I own 3 used cars. I OWN a studio flat bought with cash. Never took a loan in my life.

Do I not enjoy life? Hardly. My one car is a V8 Jeep. The other is a BMW M sports car. And I go out with buddies every other night. I just know how to control my spending.

you hardly earn 10K and you own 3 cars and a flat?!?!?!? hmmmm interesting

I dont want to argue with you... but you definitely make no sense... you paid for a flat up front and with your little salary?!?!?!? honestly, have you been saving your salary for the past 10years???!?!

what ever you have done... I respect you...

I wish I could be like you but reality is just painful on this side of my world

I'm not on salary. Do my own thing. I also didn't pay rent during college thanks to parents. Costs weren't that high before 2005 anyway. Not that hard.

Drove a 1990 Merc worth 13k in college. Saved for flat worth just under 300k. Then bought 3 other cars worth a total of 120k over 2 years. The dum option would've been to go buy a Porsche Cayenne with all that money.

quatroporte wrote:
No... this is not the issue... we all CAN and could afford credit from banks as far we keep our jobs...

the question is, WHY banks don't cooperate when they find out you lost your job????

Okay, so if you feel you can live with the credit and loans from the bank - its your responsibility - but so far as you you can handle the situation and pay back any dues in the case of an emergency - like losing your job or the unfortunate demise of the primary earning family member (without insurance). When you take a 50/100k loan, you bloody well know the risks involved. And paying back such a loan amount is NO easy task.

Agreed the banking system is stupid and not favourable towards customers - but hey - it IS their money. what would you do if someone took a loan from you? wouldnt you panic if you found out the person is not in a position to pay you back for months/years or has run away???

gtmash wrote:
Nope. The middle ground is the sensible person who does not live beyond his means. I am single and barely make 10k a month. Been working since in college. I own 3 used cars. I OWN a studio flat bought with cash. Never took a loan in my life.
I just know how to control my spending.

Same here buddy. Its not too difficult, but it not too easy either. There are tough times, but there are rewarding times too.

michaeldubai wrote:Agreed the banking system is stupid and not favourable towards customers - but hey - it IS their money. what would you do if someone took a loan from you? wouldnt you panic if you found out the person is not in a position to pay you back for months/years or has run away???

They were stupid by granting a loan w/o 30-50% downpayment and any coverage.
They exchanged all of those on blanck cheque but it's illegal.

Red Chief wrote:

michaeldubai wrote:Agreed the banking system is stupid and not favourable towards customers - but hey - it IS their money. what would you do if someone took a loan from you? wouldnt you panic if you found out the person is not in a position to pay you back for months/years or has run away???

They were stupid by granting a loan w/o 30-50% downpayment and any coverage.
They exchanged all of those on blanck cheque but it's illegal.

It's funny that the entire loan system is based on blank cheques. I am not familiar with loans, but someone I know sat down and filled up 48 cheques to cover his future 4-year payment for a new Toyota. I guess that's the system here. Even worse is what I find out in this forum...the bank blocking your account if you lose your job, and not using that to pay off the loan. And still people take that risk, assuming that it will never happen to them, or they will "work it out" with the benevolent bank.

gtmash wrote:It's funny that the entire loan system is based on blank cheques. I am not familiar with loans, but someone I know sat down and filled up 48 cheques to cover his future 4-year payment for a new Toyota. I guess that's the system here. Even worse is what I find out in this forum...the bank blocking your account if you lose your job, and not using that to pay off the loan. And still people take that risk, assuming that it will never happen to them, or they will "work it out" with the benevolent bank.

The blank cheque is a cheque with your signature only that you give to a bank as a guaranty. Theoretically the bank will be able to write any amount there in the future...

run away

i know a country nobody will come near to you there

this is crazy i mean even if you ask the bank to work for them for free to give them the money they would say no

good luck

quatroporte wrote:

gtmash wrote:

quatroporte wrote:
Those who live on ONLY savings and without any bank loans, credit cards extra are two types... either you are extremely poor banks won't lend you or you are extremely rich so you never need credit from banks.

Nope. The middle ground is the sensible person who does not live beyond his means. I am single and barely make 10k a month. Been working since in college. I own 3 used cars. I OWN a studio flat bought with cash. Never took a loan in my life.

Do I not enjoy life? Hardly. My one car is a V8 Jeep. The other is a BMW M sports car. And I go out with buddies every other night. I just know how to control my spending.

you hardly earn 10K and you own 3 cars and a flat?!?!?!? hmmmm interesting

I dont want to argue with you... but you definitely make no sense... you paid for a flat up front and with your little salary?!?!?!? honestly, have you been saving your salary for the past 10years???!?!

what ever you have done... I respect you...

I wish I could be like you but reality is just painful on this side of my world

I guess it makes a big difference when parents help with money - no student loans.

If your a Muslim, just come to Bangladesh

kanelli wrote:

quatroporte wrote:

gtmash wrote:

quatroporte wrote:
Those who live on ONLY savings and without any bank loans, credit cards extra are two types... either you are extremely poor banks won't lend you or you are extremely rich so you never need credit from banks.

Nope. The middle ground is the sensible person who does not live beyond his means. I am single and barely make 10k a month. Been working since in college. I own 3 used cars. I OWN a studio flat bought with cash. Never took a loan in my life.

Do I not enjoy life? Hardly. My one car is a V8 Jeep. The other is a BMW M sports car. And I go out with buddies every other night. I just know how to control my spending.

you hardly earn 10K and you own 3 cars and a flat?!?!?!? hmmmm interesting

I dont want to argue with you... but you definitely make no sense... you paid for a flat up front and with your little salary?!?!?!? honestly, have you been saving your salary for the past 10years???!?!

what ever you have done... I respect you...

I wish I could be like you but reality is just painful on this side of my world

I guess it makes a big difference when parents help with money - no student loans.

I paid for the last few years of college myself. There is no "student loan" system for expats in USA or UAE. Parents have to cough up the money up-front. When I transferred here, I was probably the only one in my snooty college who covered at least part of my college cost.