People facing financial troubles are sure to benefit from this impending law…
A new law approved by the UAE Cabinet, coming into force in January 2020, will support individuals facing financial difficulties and help stop people from going bankrupt.
No this is absolutely not a spam ad at the bottom of a random website.
This is a crucial piece of forward-thinking legislation, proposed and passed by the UAE’s cabinet to prevent people from falling into an ‘insurmountable debt trap’.
The new law, which will come into operation at the beginning of next year, proposes credit restructuring, with new government-endorsed concessional loans.
This applies to both citizens and residents and ensures a fair compromise between loan companies and their customers.
But it goes further than that.
Crucially, it also includes a provision to protect debtors from legal prosecution – empowering individuals to work their way back to solvency, contribute to the economy and provide for their families.
In practice, courts will assign experts to cases of financial precarity. The expert will act as a liaison and mediator between lender and borrower, and as the architect of a repayment plan.
The repayment plans must be agreed by both parties, and can be spread over a maximum of three years, during which term – the individual cannot take any more loans.
Which is important. Aside from preventing potential interest juggling, if you’re already at this stage – it’s probably best that sit you sit the next game out, partner.
Limiting the period of repayment terms should help ensure more responsibility on the part of lenders too. Which in turn makes for a more mature credit market and the UAE a more attractive prospect for international investment.