“Do banks write off credit card debt after six years?”


I left the UAE in 2008 because I had some credit card debt I couldn’t pay. I haven’t paid them yet and haven’t heard from the banks. When I left I owed 80,000 Dh but I guess the amount has increased now.

How long do I owe the banks this debt? A friend told me that debts are canceled after six years. Is it true and will I be able to return to UAE no problem ? KR, South Africa

It is not correct that debts are canceled after six years. In many countries, there is a set period beyond which a debt cannot be collected.

For example, it is six years in the United States and three years in Germany. UAE civil law refers to statute of limitations for debts after 15 years, but there are exceptions and specific provisions.

It is unusual for a bank not to attempt to collect a debt of this size and the time limits exclude any attempt that may have been made to collect what is owed.

Even after this time, a police case can still be filed and a bank can employ a third party to collect a debt.

It is possible that KR may be detained at immigration if he attempts to enter the UAE.

Any borrowed money must be repaid, so KR must contact the bank to negotiate a settlement. He may accept a reduced amount if he can make a substantial lump sum payment.

It is unusual for a bank not to attempt to collect a debt of this size and any delay excludes any attempt that has been made to collect what is owed.

Keren Bobker, Senior Partner at Holborn Assets

My husband passed away last year but his bank, HSBC, recently sent me an email addressed to him and marked “deceased”. It started with a greeting and was from a new relationship manager who introduced himself and requested a face to face meeting to help my husband with his future.

I was quite upset and more than a little upset that the bank was sending this insensitive message. If an account is marked as deceased, surely a bank would remove it from its mailing list?

I had contacted the bank earlier to access the funds, but I can’t bring myself to complain about it. However, I don’t want this to happen again. CE, Dubai

I understand this would have been an automated email, but bank staff should remove the names of deceased customers from their mailing lists. The issue was referred to my contacts at HSBC and they acted very quickly, contacting Ms C to apologize within hours. The bank account has also been closed as previously requested.

An HSBC spokeswoman said: “We take every customer complaint seriously and have taken this opportunity to review and improve our internal process. This should not have happened and we apologized to Mrs C.”

I quit my job after 21 years. My current salary is 6,300 Dh but company records show that my base salary is only 500 Dh as this has never changed. My sponsor is a free zone and their records show my base salary is Dh3000.

The salary distribution in the company always stipulates that 60 percent of an employee’s salary is the basic element. This means that on my salary it should be 3780 Dh, not 3000 Dh. How is my tip calculated? Is it based on the amount shown on the documents or what I get paid each month? PF, Dubai

Employment laws in the UAE now apply to all major free zones except for the two major financial zones.

When an employee works for a free zone company, the free zone is the sponsor rather than the actual employer.

The gratuity is calculated on the last basic salary and the company must use it. It is not uncommon for a contract to remain unchanged, but it is the salary actually paid that counts and the accounting and HR departments will have a record of this amount.

Article 51 of the new labor law stipulates: “The full-time foreign worker, who has completed one year or more in continuous service, is entitled to end-of-service indemnities at the end of his service, calculated in based on base salary. according to the following: a. A salary of 21 days for each year of the first five years of service; b. A salary of 30 days for each year exceeding this period.

He adds: “It is required on the basis of the above that the end-of-career indemnity of the foreign worker in its entirety does not exceed two years of salary.

On the base salary of Dhs 3,780, assuming no statutory deductions and a period of service of exactly 21 years, PF will receive a gratuity of approximately Dhs 73,710.

Keren Bobker is an independent financial advisor and senior partner at Holborn Assets in Dubai, with over 25 years of experience. Contact her at [email protected]. Follow her on Twitter at @FinancialUAE

The advice provided in our columns does not constitute legal advice and is provided for information purposes only.

Updated: February 27, 2022, 5:00 a.m.


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