Understanding Debt Collection in UAE

What is Debt, and why does it occur?

Debt occurs when the debtor does not pay the full amount to the creditor in exchange for goods/services. It is important to know that money is the only thing that runs the business. If you do not take care of your money, someone else will have to do it. The debt collection is a common business now.

The purpose of a debt collection agency is to recover the financial amount from the debtor that he owes to the creditor. Federal Decree-Law No. 50 of 2022 (Commercial Transactions Law) states and tells us about the financial obligations and the rules to be followed while dealing with financial matters. 

A Debt Collection Company: Benefits

Having a debt collection company makes it easier for the creditor to focus on the other aspects of the business. If you are called by the debt collection company, make sure that they are doing it with fair practices.

As a debtor, you must know that dealing with debt is easy if you talk to the debtor as soon as he contacts you. The debt collectors cannot call you at unofficial hours. If they do so, they are harassing you, and you can always take action against the harassment.

• Federal Law No. 11 of 1992 (Civil Procedures Law) is all about civil and commercial cases, in case litigation has to be managed or lodged. 

Do’s and Don’ts

Similarly, they cannot enter your private premises unless you don’t tell them to do so. You can always tell them the timings to contact you, and when they should stop calling you. However, that does not mean that telling them to stop calling you will get you any relief from debt collection.

Legal Action against even Debt Collectors

The other thing to know is that the debt collectors cannot ask you for more money than what you actually owe. If you think that they are doing so, legal action can be taken against them.

Confidentialtiy

Another important thing in debt collection dubai is confidentiality. The debt collector must never give letters to the debtor in public. He must always give the envelope in a subtle way and make sure it does not get personal to anyone. Only the debt collector should get that envelope. As a debt collector, you can disclose information about the borrower. Therefore, whenever you are choosing a debt collection agency, make sure that you have chosen a professional company that will recover your debt with dignity and respect.

Debt Recovery is always very important

The debt recovery dubai is important, yet the toughest aspect of the business. There are customers who would pay the creditor on time, and so the business never suffers financial loss. The business owner might not take serious notice of unpaid invoices unless the financial cycle seems disturbed. Of course, the business is earning money from what the customers give to the business.

There are debtors who delay payment, or they forget the entire payment. Such types of debtors need to be taken care of. If they are doing so persistently, the creditor company will have to ask the debt collection for their help. You cannot just chase the debtor and leave your business. Hence, you will need a professional debt collector who will do this job for you. 

• Federal Decree-Law No. 14 of 2020 is all about cheque-related debt recovery.

Debt Collectors and the Hiring

The debt collection is done in various ways. One way is where the debt collector would buy the debt from the creditor company and deal with the debt on themselves. The other way is that a debt recovery agent will be hired by the creditor company, and they will make sure that as much debt can be recovered. Once the debt has been recovered, they will ask the creditor company, a small percentage of the recovered financial amount. Sometimes, it becomes stressful for the debtors when they are going through the debt collection process.

A Balance Debt Collection Process

A balanced debt collection process is always needed. The reason for their being traumatised is the daunting personality of the debt collector. There are debt collectors who become really harsh with their dealings. They sound intimidating and harass the debtor. You should always hire a debt collection agency before the time. Such services are your last resort to manage the lost money or what is owed by the debtor to you. In some cases, soft reminders given to the debtors will get your money back.

Sometimes, it happens that the debtor company is ignoring the debt collector on purpose. You are successful with debt collection if you are doing fair practices, which means the debt collector shall not harass the debtor, and call him during office hours only.