Answered: Most Burning Questions About Debt Recovery in UAE

Debt recovery has been a common phenomenon in the everyday business life. In case a debt is constructed through a fixed amount or by any type of identifiable moveable asset, in such event, the lawyers of Dubai have multiple ways to for such debt recovery.

Pre-Conditions!

Whenever, a debtor commits a default with respect to the Cheques or promissory notes or invoices, the payment orders come into play. In order to recover a debt through the efficient way of payment orders, some prerequisites must be kept in mind. These are, firstly, in order to qualify the debt for payment order, the debt should be in written form, i.e. in ways of letters, emails or a contract. The rationale behind the same is that, any claim shall be proved before the court, and proving an oral claim is nearly impossible in the court. As a result the court only accepts the written claims.

Secondly, the creditor’s right shall be due for the receipt of the payment, owing to the debt. In case the debt is conditional, the creditor will have to wait for that condition to get fulfilled. Similarly in case, the debt is attached with a lapse period, the creditor will have to wait for that period to get lapsed.

Thirdly, the debt should be of a specified amount on a moveable asset only. This is the only debt which can be covered under the payment order. Lastly, in order to get a payment order, the law provides for the concept of legal interest, whereby the legal interest on the part of the delay of the payment with respect to the due date is calculated in quantifiable terms. In addition to this the creditor can also sought to take any precautionary measures for the recovery, such as attachment of the assets of the debtor.

Another type of claims that can be recovered by the ways of payment order are claims that are arising due to commercial contracts or commercial papers. But a prerequisite for the same is that they can be only claimed through way of filing of commercial claims.

In case where the creditor’s claim is fulfilling all the requirements prior to the filing of case in the court, then in such a case debtor will have to be notified for the same and shall be given at least 5 days to pay the amount due to the creditor. The channel of notifying passes through a notary only and this is important because it establishes a credibility on the part of the creditor applying for the claim, at a stage where the claim reaches the judge. The intent of the same is to avoid the argument of improper way of notifying or not receiving of the notice, which can be raised bu the debtor, especially at that stage. The payment order thus are non-bickering processes, which have the least requisites, thereby resulting in the low expenditure and expeditious way of recovering the debt.

Owing to the fast procedure of the payment orders, one is expected to undertake this route only when the debtor’s accept the claim of the creditor and not when there is refusal on the part of the debtor for such claims. The reason behind the same is that, in case of the refusal, a court case is usually taken as recourse by the parties to the claim, which will eventually make is a long going process that will be requiring more evidence and hearing dates which will eventually result in increased expenses.

Any type of claims can be settled through these payment orders, such as personal status claims, civil claims, commercial claims, employment claims, etc. In case of the rejection of the payment order, the creditor can then sought to substantive claim through courts proceedings.