Submitted by Jen Jones on Fri, 10/02/2009 - 8:38am
As bad as collection agents can be in America, their efforts pale in comparison to the debt reconciliation efforts that are allowed in Dubai, the most populous state within the United Arab Emirates and the penultimate symbol of Middle Eastern opulence.
In Dubai, which is located along the southern coast of the Persian Gulf on the Arabian Peninsula, those who bounce a check, miss a rent payment or go into debt of any kind, are subject to arrest, incarceration and a quick prosecution that in many cases will mean time behind bars. Before you think this is part of some outdated law that rarely gets enforced, like many bizarre American laws that show up on funny e-mail chains--think again.
As part of a statewide effort to curb financial fraud after several years of unprecedented financial expansion, government officials are actively tracking down anyone who owes money and encouraging private citizens to do the same. To be in debt in Dubai is to be labeled a criminal.
To the government's credit, they have been properly aggressive in nailing fraudsters and egregious scammers to the tune of well over $3 billion. However, law enforcement is also coming hard after ordinary folks who happen to fall behind on everything from rent to their checking accounts. Making matters worse is that many of those falling into financial disarray are foreigners that, for the most part, have driven the region's exponential growth.
A real estate agent named Ali Fariq and his brother are now serving three years in jail after initially being kidnapped at the hands of an investor with whom he worked. Apparently, the investor was not too happy with her return on the deal and by force had them sign checks for $600,000 to pay her back. Knowing they did not have those funds, she promptly presented the checks to authorities to demonstrate fraud. Despite their ability to prove the checks were not theirs and signed under duress, the government recognized another opportunity to show the public that financial misdealings of any kind will not be tolerated and put the siblings in prison.
While the former is an extreme case, lenders now have a precedent by which to pursue those who owe. In some cases, all it would take to engage criminal proceedings is a one-page document proving a late payment or inadequate funds.
Global economy proponents fear such laws will hamper Dubai's ability to bounce back after the recession. Known for its obscenely ornate resorts, vast commercial real estate developments and ability to cater to the world's ultra-wealthy, Dubai literally established new limits for what money could buy. Its legal system, one that many deem antiquated because of its base in Egyptian civil and Islamic law, is unable to keep pace with quickly changing social systems and a financial structure that its rapid growth and foreign investment introduced.
Those who invested in Dubai from other parts of the world have typically been able to operate with the understanding that business and personal debt, while not something to be brushed off, carried with it legal protections or at the very least, more reasonable ways to be alleviated.
Arrests and prosecutions for debt have increased substantially since the global markets tumbled many months ago. Police are being torn from more serious protective efforts to tracking down those who owe what in America would be subject to a charge off or simple renegotiation. Some pressure is being applied to government to alter the laws and allow debts to be settled in civil courts, not criminal.
In the U.S. , debtors prisons were formally eliminated by federal decree in 1833. However, creditors still have some legal tools which can seriously affect you and your family. If you fail to pay a debt, you can be sued. If a judgment is obtained, the creditor can take money from your bank account and force a sale of your home or other property. But you can fight back! Bankruptcy will immediately stop a lawsuit from continuing, and put you back in control! Call a bankruptcy attorney today to learn more. In North Carolina, contact the Law Offices of John T. Orcutt to set up a free initial debt consultation. +1-833-627-0115.
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