UAE visa amnesty highlights importance of financial counselling and community support

Social workers say they need to reach out to people mired in debt

Information on the visa amnesty was available at the Kerala Muslim Cultural Centre in Abu Dhabi. Victor Besa / The National

Counselling, financial advice and emotional support are crucial for families who have found themselves caught in limbo and unable to pay off their debts.

Reaching out to people in financial trouble and who may be depressed is a social obligation, says KV Shamsudheen, who hosts a weekly radio programme advising Indian workers on financial planning.

“Each of us, whether social workers or as individuals, can play a role in talking to people we believe are in trouble," he says. "Many people are stuck because, unless they settle the cases against them and pay their debt, they cannot leave."

"They want to apply for amnesty but they are in a debt trap,” he says, referring to the UAE visa amnesty programme that allows people who have overstayed or entered the country illegally to adjust their status without punishment. The scheme began in August and was extended twice. It will now stop at the end of December.

Mr Shamsudheen told of an Indian social worker who took his own life in Ras Al Khaimah last week after his business failed and he was forced to send his family home. He said men like that stood a better chance of being saved if they were given the support they need.

“We need to reach out to people so they think of other solutions and such cases do not recur. As a society, we must be there for each other,” Mr Shamsudheen said.

Lawyers and social workers said residents must repeatedly be warned against issuing post-dated cheques and security deposits if they do not have sufficient funds.

Post-dated checks are commonly used as a form of guarantee or security in commercial transactions in the UAE and held in expectation of receiving payment in the future.

Such cheques are used to guarantee payment for housing, school fees and car loans. They are also used as collateral for sales on credit to suppliers, dealers, distributors.

Writing a cheque that bounces can result in fines or a jail sentence.

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Read more:

After 22 years living in the shadows, woman finally gets passport

Residents hurry to settle debts and court cases before applying for UAE visa amnesty

Bounced cheques in UAE: new rules 'a progressive step for the justice system'

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In November last year, Dubai courts reduced the punishment to only a fine if a bounced cheque was valued at Dh200,000 or below.

Reducing the offence to a misdemeanour ensures that non-fraud cases of residents in debt are handled more leniently and they can continue working to pay off their debts, rather than going to jail.

In the rest of the country, however, a bounced cheque is still an offence punishable either by jail or a fine, depending on the nature of the case and the amount.

As per the new directive, a case can be filed if the first cheque bounces in an instalment payment. Additional cases cannot be filed for the remaining cheques that bounce within the same instalment payment.

However, lawyers said loan sharks or rental companies sometimes deposit the remaining cheques in banks in another emirate such as Sharjah to trigger an additional bounced cheque case against the person already deep in debt.

“The cheques are being deposited in Sharjah instead of Dubai because it’s difficult to immediately find out that it’s part of the same transaction,” said Barney Almazar, a director at Gulf Law and head of legal aid at the Philippine embassy.

About 515,000 bounced cheques with an approximate value of Dh26.2 billion were handled by the UAE Clearing Cheque System during the first five months of this year, according to Central Bank data. This represented 31,000 fewer cheques compared with the same period last year.