Debt Collection in UAE: Effective Debt Collection Strategies

Debt Collection in UAE_ Effective Debt Collection Strategies

In the United Arab Emirates (UAE) debt collection can be a complex and time consuming process given the multitude of specific laws governing the collection of  debts. Understanding the legal options available for recovering debt in the UAE is crucial for creditors and debtors alike.

Sources and Methods of Debt Collection in UAE

Sources and Methods of Debt Collection in UAE

Each method and source is tailored to address different scenarios and challenges in the debt collection process, highlighting the UAE’s comprehensive approach to financial disputes. Understanding these options is essential for both creditors and debtors to navigate the system effectively. Let’s delve into the specifics of these sources and methods, which encompass a wide range of legal, financial, and procedural tools designed to facilitate the efficient resolution of debt-related issues.

UAE Civil Code

The UAE Civil Code provides the legal framework for debt collection in the UAE. Under  Article 902 of the Civil Code. the creditor has the right to request the performance of a debt from the debtor. This request for repayment often takes the form of a formal demand letter clearly stipulating the outline of the amount owed, the terms of repayment, and a deadline for payment. If the debtor fails to respond to the demand letter or refuses to pay, the creditor can take legal action to recover the debt. 

Civil Court Case

Legal action for debt collection in the UAE may include filing a civil case in court as  the UAE legal system allows individuals and businesses to pursue legal action to recover debts. To file a civil case an individual would need to provide evidence of the debt, such as invoices, contracts, or other supporting documents. If the court rules in your favour, the debtor may be ordered to pay the debt, plus a certain minimal amount of legal costs and interest as permitted by local legislation. However, the court process in the UAE can be time-consuming and expensive, so it is important to carefully consider whether pursuing legal action is the best option for your situation.

UAE Penal Code

The Penal Code also addresses debt collection in the UAE. Article 399 of the Penal Code criminalizes the issuance of a cheque without sufficient funds. If a debtor issues a cheque that bounces due to insufficient funds, the creditor can file a criminal complaint against the debtor which may result in fines and imprisonment for issuing a bounced cheque.

Payment Order Procedure

In addition to the Civil Code and Penal Code, the UAE has other legal options for debt collection, such as the payment order procedure. This is a fast-track process for recovering debts by allowing creditors to obtain a court order for the payment of a debt without the need for a full trial. The payment order procedure is a cost-effective and efficient way to recover debts.

Bankruptcy Law

In cases where a debtor is unable to pay their debts, UAE bankruptcy laws provide a legal framework for debt restructuring and liquidation. This law allows debtors to negotiate with creditors to restructure their debts and avoid liquidation. If a debtor is unable to repay their debts, the bankruptcy law provides procedures for liquidating the debtor’s assets to pay off their creditors. 

Debt Collection Agency

Another option for debt collection in UAE is to work with a debt collection agency. In the UAE these agencies are licensed and regulated by the government, and can help persons recover debts through a variety of means, including phone calls, letters, and legal action. Debt collection agencies in the UAE have expertise in local laws and customs, which can be beneficial in navigating the debt collection process. However, it is important to choose a reputable and experienced debt collection agency to ensure that your debt is recovered in a timely and professional manner. 

Alternative Dispute Resolution

In some cases, alternative dispute resolution methods such as mediation or arbitration may be used to resolve debt disputes in the UAE. These methods can be faster and more cost-effective than going to court, and can help parties reach a mutually acceptable agreement for debt repayment. 


Overall, debt collection in the UAE can be a challenging process governed by a variety of complex legal frameworks, and multiple ways to recover debts. These include: Civil Code, filing a civil case in court, initiating criminal proceedings for bounced cheques via the Penal Code, using the payment order procedure, applying bankruptcy law for debt restructuring and liquidation, using a debt collection agency and alternative dispute resolution methods such as mediation or arbitration. It is therefore important to carefully consider all of the legal options for debt collection and seek professional advice if needed.

Article by
Elena Schildgen
Managing Partner of Meyer Reumann & Partners

Email: [email protected]


Get a Free Consultation to Find Solutions to Your Legal Issues

Leave a Reply

Your email address will not be published. Required fields are marked *