E-Paper
Sign In
Job Situation Has 
No Bearing on 
Loan Status
Q: I am a businessman. I have taken bank loans for three years. I had been paying all instalments on time for two years when I used to earn Dh100,000 per year. However, my annual income has drastically dropped down to Dh35,000 due to the global financial crisis. When asking the banks to reschedule my instalments, they refused. What am I supposed to do? Is there any way out to reschedule my debts to avoid any legal action? Please, advise.
- PUBLISHED: Tue 5 Jan 2010, 12:33 AM UPDATED: Mon 6 Apr 2015, 2:21 PM
- By:
- K.k. Sarachandra Bose (Legal View)
A: A bank loan is a contract between the Bank/Lender and the Borrower. The terms of repayment, interest applied, etc. are ruled by the terms of the contract. The borrower also may keep in mind that the funds borrowed by him are in fact public funds and the Bank is to repay the funds to its depositors. The loss of job, reduction in salary/income or global financial crisis is no reason for non-payment to the Bank. There is no legally acceptable method to compel the Bank to reschedule the instalments unless the agreement stipulates to the effect.
Therefore I would advise the Borrower to meet with the Bank's top management either personally or through his lawyers and discuss the issues and bring to an amicable settlement. The Borrower should approach the Bank with a request to reschedule the payments. The fundamental principle that the debtor must go to the creditor is to be followed. Borrower also must accept the supremacy of the Lender in this respect. Normally, banks do reschedule the payments if they are convinced of the situations and the genuineness of the borrower.
Recommended For You
Q: My sponsor has suddenly cancelled my residence visa without prior notice and refuses to release my passport. He rather booked me a flight home next month. The company is holding my passport. Do I have the right to get it back or they are entitled to keep it as I had earlier agreed to give it to them? How may I check my status in the immigration department as I believe they will impose a ban against me? Can I cancel my flight back home if I get another job here in the UAE?
A: In your letter you have not mentioned the type of your contract, the number of years you were working with the company and on what grounds you were terminated. As per the law, the employer has no right to retain your passport and you may file a complaint at the labour department to obtain your passport and for compensation for the notice period and other benefits you are entitled as per the UAE labour law. It will depend on the decision of the labour department whether you can work here or not.
Q: I have sub-rented a studio flat in a villa from an agent since January 2009. Unexpectedly, the landlord, in August, asked me to vacate the flat within a month, claiming that the tenancy contract he signed with the agent was due to end by last September. The agent agreed with the landlord to pay him on a monthly basis. He also promised to show me another flat. He even took some advance cash for this purpose. Starting this December, the landlord complained about not receiving the rent from the agent on a regular basis. He threatened to file a complaint against him with the police unless I vacate the flat immediately. He later asked me to sign a direct fresh contract with him. I kept the agent updated on everything. Since I am staying with my family and not at all satisfied with the agent's role, I signed a new contract with the landlord for the period from December 2009 to November 2010. However, the agent said he will sign a fresh contract to invalidate mine. Is this legal? How, whom and where do I approach to get back the amount I paid to the agent?
A: Since you have signed the lease contract directly with the landlord, the agent cannot invalidate it unless the agent holds a power of attorney from the landlord to terminate the tenancy contract. To claim the amount that you have paid to the agent, you may file a complaint with the rent committee for remedy. You may also file a police compliant against the agent for cheating you.
K.K. Sarachandra Bose is a Partner/ Corporate, Commercial and Contract Lawyer at Dar Al Adalah Advocates and Legal Consultants. Readers may e-mail their questions to: ktedit@emirates.net.ae or send them to (Legal View), Khaleej Times, Dubai P.O. Box 11243.
Compiled by Ahmed Shaaban