Disputes related to debts are common in the UAE, primarily because of the level of economic activity and the common practice of borrowing on credit both personally and commercially in that nation. Most people initially seek out civil remedies for collection, but at times, law enforcement will need to become involved.

Filing a police complaint for debt UAE, in these instances, can help protect you and save your position. With that said, it is important to know when to call the authorities in order to prevent additional legal hassles and enforcement issues.

Debt Disputes: Defaulting to Civil Proceedings

Generally, in the UAE, debt disputes are treated as civil matters. Whether you’re dealing with a bounced cheque, an unpaid loan, or an unpaid invoice, you should start with a friendly negotiation.

If a friendly resolution doesn’t work, you start civil litigation; although, in some cases, making a police complaint for debt UAE might be necessary, especially if the debtor is acting with possible intent to defraud or doesn’t want to cooperate.

However, the UAE courts are a structure that allows creditors with legal avenues to recover dues. The civil courts, small claims tribunal (particularly in Dubai,) and the execution courts can produce positive results.

Police Complaint for Debt UAE: When Can Authorities Get Involved?

The UAE generally handles debt as a civil matter, but if a debtor takes certain actions, this could lead to criminal liability, justifying police involvement.

Bounced Cheques 

The most common situation where civil debt and criminal law overlap in the UAE is in the case of bounced cheques. When a debtor writes a cheque to a creditor and there are insufficient funds in the debtor’s account.

The creditor could press criminal charges against the debtor under the UAE Penal Code, as amended by Federal Decree-Law No. 14 of 2020. Although these amendments have decriminalized many cheque-related offences for lower value amounts, the law still classifies individuals as liable for high-value cheques that must be paid, or bounced cheques issued in bad faith (such as the intention to commit fraud).

In many cases, if the creditor is pressuring for debt payment UAE, the creditor could make a police complaint, leading to serious consequences, including a travel ban and/or arrest warrant. This often forces the debtor to make payment. A police complaint often leads to debt collection UAE.

Fraud or Misrepresentation

If a debtor secured goods, services, or money by way of forged documents, impersonation, or false or misleading promises, they have committed criminal fraud.

This is particularly pertinent in commercial transactions because deceit is purposeful. The creditor should file a police complaint for debt UAE to commence criminal proceedings and prevent further losses.

The filing of a police complaint for debt UAE holds a great amount of weight in debt collection Dubai, given the nature of transactions relying predominantly on faith and records.

Breach of Trust (Amanah)

If the debtor misappropriated money or properties that were placed in their hands, meaning that they abused the trust of the creditor, especially where money had been given to the debtor for a particular purpose, i.e., to invest, or to procure, the debtor could have committed a breach of trust crime. In other words, the trust that was established when the debtor received the money or other property was abused.

This is an offense under UAE law and punishable. In this circumstance, the creditor can escalate the matter by filing a police complaint for debt UAE to empower the authorities to instigate action.

Misappropriation of money or property or wrongdoing is generally a route that can provide effective remedies in complex debt collection UAE.

Threats or Harassment from Debtors

On the other hand, if a debtor threatens, harasses, or defames a creditor, the creditor can also report this to the police. These actions may not have a direct relationship to the debt itself, but they’re in violation of the UAE Cybercrime Law or Penal Code.

Filing a police complaint in these instances safeguards the creditor’s rights as well as their personal safety. In so doing, it re-emphasizes the legal limitations of debt recovery where Dubai is concerned and asserts the need for ethical actions during the recovery process.

Conclusion

In the UAE, debt disputes typically start as civil matters and should be resolved by negotiation or civil litigation if necessary.

However, in circumstances where debtors have committed acts like issuing cheques which have bounced, wrongdoing (e.g., fraud), misappropriated funds which were held in trust, or been involved in threats, etc., this can change a civil matter to a criminal one.

The key points to remember are these: 

You should lodge a police complaint for debt in the UAE when the debtor acts in bad faith, has committed fraud, or your legal rights are in peril because of their wrongdoing.

Lodging a complaint will not only protect your rights, but will also assist with accelerating debt collection in the UAE or debt collection in Dubai, and facilitate your resolution to obtain a remedy when civil remedies have not facilitated the collection of the debt.

When a case is complex, having a consultation with the Best Lawyers in Dubai, (such as the team of lawyers at Khairallah Law Firm) will provide you with a degree of advantage in law to facilitate recovering your dues, and knowing when to transition from civil to criminal channels is essential for successfully recovering your dues. 

Having said that, contact Khairallah Advocates & Legal Consultants and benefit from our free 30-min legal consultation.

*Disclaimer: our blogs, law updates, and FAQ’s are freely distributed for educational purposes and to showcase recent updates and regulations in the UAE’s framework.

If you have any questions and need assistance, contact us at our number or book an appointment online.