I have a credit card and a bank loan, so if I lost my job for one reason or another would a bank wait until I find a new job or immediately file a case against me? Also, would my monthly instalments be frozen or would a bank overcharge me due to the delay of not paying? From a legal perspective, is there any understanding and tolerance extended until I secure a new job? JA, Abu Dhabi
In this situation a bank will not immediately file a case against anyone but all bank accounts will be frozen to ensure that debts do not increase and to hold any money in the account against the debts. A person will generally have a couple of months before the bank starts to consider taking legal action or filing a police case, although it varies depending on the bank and the size of the debts. Some banks are more amenable if aware of the circumstances. To give yourself breathing space, it is important that everyone builds up a cash fund to cover all outgoings for at least three months, and preferably six, to avoid problems in such a situation.
Keren Bobker is an independent financial adviser with Holborn Assets in Dubai, with over 20 years experience. Contact her at email@example.com. Follow her on Twitter at @FinancialUAE.
The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice.
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