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Business Debt Collection
Being in business in U.A.E. is one of the most challenging fields to choose. It has also been regarded as the most difficult place in the world for debt collection by the Global Ranking on Debt Collection, 2018. Keeping an eye on your business statistics and taking care of profit and loss graphs is tedious work.
That is why the market is full of professionals who want to excel in this. Business debt collection is a branch that emerges in business. It allows the lenders to collect their money back from people who were initially given the money. As business debt collection is an arduous task, it is collected fairly by the debt collection agencies.
Debt Collection Agencies
Being in business will not get easier any time soon as the job is quite hectic and time-consuming. Moreover, the tasks are stressful as well as costly for business owners. Debt collection is a job full of responsibilities. It does not necessarily have to be burdensome if one knows what they are looking for and the perfect time management to collect your money back.
Our debt collection agencies have a full-time responsibility of keeping a record. They keep an eye on the money given, when it was given and how much time do they have for paying it back. Some specific terms and conditions regulate the flow of debt among the money lenders and the debtor.
The debt collection agencies have the power to act against you if you are unable to pay one’s within a specific time limit. In U.A.E., debt can be either an express contract or in written form. Putting an agreement into writing is highly encouraged by the business debt collection agencies.
However, collecting debt in U.A.E. is a complex process as compared to other countries. As per the recent statistics of debt recovery firms, U.A.E. is second last in the table of debt collection in about fifty countries.
The government has a “collection complexity” score of 81 out of 100. It was based on the insolvency proceedings, court mattes as well as practices adopted for payment. The collection of business debt has been described as “severe” in all emirates of the U.A.E. The country is known for its much-complicated legal framework.
Debt collection agencies have a significant role in keeping tabs on the money lending and money collecting policies.
Security Cheques and Invoices:
Our debt collection agency obtains
- Signed terms and conditions (T&C) from our customers.
- Information about total cost, how it is paid, and in what time frame it is to be paid.
- Overdue or post-dated cheques.
In the past, this has been a common practice in U.A.E. to repay debts. However, a business owner can always file a legal case against a client who does not refund the money within a specific time frame.
Charging of Interest on Loan
Debt collection agencies charge interest on the amount which is due. When a debt is pursued, commonly, a claim for interest is added. However, the right to that claim is often subjected to confusion. For the contracting parties in U.A.E., this is an area of confusion due to the prohibitions of Shariah Law.
However, this confusion has been cleared by the U.A.E. commercial code of practice, article number 76, which states that creditors can apply interest on the commercial loan as per the rate stated in a contract. A Debt collection agency in U.A.E. is of the view that they should collect the debt with some profit. However, that is unnecessary as one can always opt for interest-free debts by stating this in the contract.
Bounced Cheques and Their Issues
Collection of business debt also requires dealing with bounced cheques. A criminal case can be made from a bounced cheque, both against the authorized signatory and the defaulting client. One should have all the necessary documents to file a legal action, including:
- Electronic I.D.
- Signatory’s passport
- Trading license number
Sometimes it happens that a different person signs the terms and conditions. So, one should have evidence of a no-objection certificate signed by the person who has provided the cheque. A copy of the following documents is needed:
- Electronic identity card
- Additional contact details like address, primary and secondary phone numbers
A police case may end up in the person being banned from the country. It can also lead to a renewal of visas and opening all former and current bank accounts. If a different individual signed your T&C, you should also provide a N.O.C. (no objection certificate) signed by a cheque provider, a copy of their electronic I.D./passport, and additional contact details (residence, phone numbers, and email addresses).
Dubai sticks to stringent laws and policies when it comes to business debt collection. Various agencies are there to govern certain rules and regulations that apply to money lending and collection procedure. In critical matters, a police case will result in the person being unable to exit the country, renew visas, or open bank accounts.