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Penalty For Unpaid Debts In Dubai 2023

penalty for unpaid debts in dubai

Penalty for unpaid debts in dubai used to result in debtors facing imprisonment for at least three years.

However, a new legal principle introduced by the Court of Cassation in the United Arab Emirates has brought significant changes to this practice.

In this article, we will explore the recent developments in the unpaid debts penalty in Dubai and the key factors associated with it.

Office of Al Mulla. Whatsapp: Click here. Phone: 00971501961291.

Penalty for unpaid debts in Dubai UAE.

In the past, debt defaulters in Dubai faced the harsh prospect of imprisonment for a minimum of three years. The severity of this punishment could escalate if the defaulter was deemed unserious about settling their debts.

However, the landscape has shifted with a new principle introduced by the Court of Cassation. This principle presumes in favour of the debtor’s insolvency, not solvency, providing them with certain protections. Here are the key implications:

  • Burden of Proof on the Creditor.
    Previously, debtors could be imprisoned without the need for the creditor to prove their insolvency. With the new principle in place, the creditor must now demonstrate the debtor’s insolvency to justify any punitive measures.
  • Concealment of Assets or Flight.
    Debtors may still face penalties if it can be proven that they are concealing their assets or attempting to flee with them. This provision ensures that debtors cannot escape their obligations by manipulating their financial circumstances.
  • Unsettled Agreements.
    If there exists an agreement between the creditor and the debtor, and the debtor ceases to make payments as specified in the settlement, legal action may be taken. This reaffirms the importance of adhering to negotiated terms.

FAQs about penalty for unpaid debts in Dubai.

The penalty for unpaid debts Dubai has changed with a new legal principle. Debtors can be imprisoned only if their insolvency is proven.
Al Mulla is an expert in handling unpaid debt cases and offers valuable legal assistance to those facing such challenges in Dubai.


The penalty for unpaid debts Dubai has undergone a significant transformation with the introduction of the new legal principle by the Court of Cassation.

This shift places the burden of proof on creditors to demonstrate a debtor’s insolvency, offers protection against asset concealment and flight, and emphasizes the importance of adhering to settlement agreements.

When seeking assistance with unpaid debt cases in Dubai, Al Mulla Lawyer & Legal Consultant stands out as the best choice, offering expert guidance and support throughout the legal process.

In a landscape that continues to evolve, understanding your rights and options is crucial when dealing with unpaid debts in Dubai.

Contact the office of Al Mulla via Whatsapp. Click here. You can also call us on phone: 00971501961291.

Read about the New Law For Debtors In UAE 2023 and No Imprisonment for Debt Dubai in 2023.

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