- May 24, 2022
- Posted by: Sarbavoum Bidhar
- Categories: home loan repay, Loan restructuring program
When a cheque bounces in the UAE, this happens to bring legal complications for the person in the picture. Today, it comes under the list of criminal offences, and we are here to unwind the legal side of this offence here. At Freed Financial Services, we have provided solutions to our customers so that they are not penalized under the eyes of the law. Within the parameters provided by the banks, our team can assist in convenient loan restructuring program and debt settlement programs, so that your life in the UAE is more manageable.
What are Bounced Cheques?
In layman’s terms, when the cheque is not able to repay the debts on the due date, it will be labelled as a “bounced cheque.” It will be returned to the payee as there are insufficient funds. Due to a lack of funds, when one loses the ability to repay the amount borrowed from a bank or creditor, that is regarded as a criminal offense.
This is where our financial professionals at Freed Financial Services have initiated the debt resolution program whereby both the payer and payee and the bank will come together to come up with a more viable solution to clear a debt. At the end of the day, laws are made to solve the problem, but with the timely negotiation of financial experts in the UAE, we help to bring forward amicable solutions.
Legal Aspects of a Bounced Cheque in the UAE
1) Before January 2022, the law considered this a criminal liability, as it falls under the category of acts conducted in bad faith. However, after the new amendment was made in Jan 2022, it is no longer regarded as a criminal offense just because of insufficient funds. This means that the debtor is still guilty of the crime, but it is less serious now. This can be solved smartly with professional debt restructuring services so as to reduce the impact of bounced cheque scenarios.
2) The presenter of the cheque has the choice to proceed with a case against the payee. As per the amended rule of Article 635, it is left to the discretion of the presenter to take action or not on the payee.
3) The explanation for this is that the cheque has been given to the presenter by the other party within a certain time frame for a certain amount and yet no payment has been received.
4) For the defense of the helpless situation of the payee, the bank statements of both parties can be displayed in court. This can be done even if the payee protests against it, as the presenter is entitled to get back their money.
5) For instance, we have witnessed cases of home loan related debts where both parties suffered as a consequence. Still, with the expertise of Freed Financial Services, we have devised special solutions like restructure home loan services, where the loan can be paid in smaller amounts.
Can you prevent bounced cheques situations with a debt restructuring plan?
Yes, that is possible, legal, and stress-free. Unless fraud or malpractice is proven, both the law and banks know that no debtor likes this phase of life. Bounced Cheques are a deal-breaker in anyone’s financial statement.
Under the debt restructuring program, the process is very simple. All the parties involved—like individuals, companies, entrepreneurs, or salaried private people—can negotiate to extend the repayment time frame. In the case of home loan restructuring programs, they can lower the interest rates of the loans taken. This will help the debtor to repay in smaller amounts and build back their credibility.
On the whole, the law no longer considers the owner of a bounced cheque in the UAE a criminal. Instead, they encourage all the parties involved to discuss and bring forward debt-free solutions to the table. We, at Freed Financial Services, are here to listen and guide you on how you can work on better mortgage debt management solutions in the most feasible manner.