The Debt Panel: ‘Am I liable to pay off my dead husband’s liabilities?’

My husband, who owned a garment exports business in Dubai, recently passed away.

I live in our home country of India, and was unaware of the enormous debt he incurred during his time in the UAE.

He would send my children and me a fixed amount of Dh8,000 every month, with which we managed our living expenses.

However, it has now come to my attention that he had a personal loan worth Dh135,000 ($36,759) with a UAE bank, credit card debt worth approximately Dh30,000, and also borrowed from his friends.

Bank collection agents have been making threatening calls over my husband’s unpaid dues. I presume he used our home address and landline number while taking out all these liabilities.

Am I liable to pay my dead husband’s loan and credit card dues to UAE banks? Will I face immigration issues if I try to enter the UAE to look for work? Or, will they come to my home to force me to repay his debts?

My family was financially dependent on my husband as he was the sole breadwinner. I am confident that I can support my family, but am clueless about how I can clear his liabilities. Please advise. KK, India

Debt panellist 1: Jaya Ratnani, managing partner at Freed Financial Services

Our sincere condolences on the loss of your husband. We empathise with your situation and understand how challenging it must be for you and your family.

While the current situation may look complicated, it is important to understand the UAE law. The law states that any individual who signed the loan application is the person accountable for all the debts incurred. This law applies whether it is a secured loan or an unsecured loan.

There is no such rule that mandates a deceased borrower’s debts can be passed over to the spouse — unless they are named as co-signer or guarantor of the loan.

It is dismaying that you are receiving threatening calls from the bank. Some collection employees would like the heirs to believe they are liable to pay from their own money, which is not the case.

It is only possible if they inherit something from the real estate before the debts of the deceased are paid.

Banks’ collection agents cannot make threatening calls or visit your premises to claim any payment if the bank is conscious of your dilemma.

As per the immigration law, you can enter the UAE without facing any issues if you are not part owner of the loan. You have the right to look for job opportunities here to secure a better future for yourself and your family.

Most banks have payment protection cover against loans. It would be best if you can approach the bank to understand the type of insurance policy that was taken at the time of the loan application.

This will help to know the exact coverage amount and the circumstances it covers, such as unemployment, permanent disability or death.

You will need to provide a copy of your husband’s attested death certificate so that the bank can open a claim with the insurance provider. It is advisable to obtain a copy of the insurance policy as you require proof and documentation of the coverage.

This can be one of the ways to fully or partially settle the outstanding liabilities, which will help you in your current situation.

Debt panellist 2: R Sivaram, executive vice president and head of retail banking products at Emirates NBD

Please accept our sincere condolences for your loss. It is important for you to be strong and determined at this time when you are facing personal and financial challenges.

Under UAE law, the individual who has signed the loan or credit card application is the one accountable for all the debts incurred. Unless you are named as a co-signer or guarantor of the loan, surviving family members will not be held responsible for the debt.

However, as per UAE law, the estate of a deceased borrower will be used to pay off the existing creditors before being passed on to the surviving spouse or legal heirs.

In case of debt default, where a bank can prove that payments were overdue, the lender would take priority in the distribution of the deceased’s assets.

In this regard, you may want to receive additional guidance from a legal representative to help you to claim and gain access to your spouse’s remaining assets, monies and benefits in the UAE, if any.

While you may not be legally liable for your deceased spouse’s debt, you may still be pressured by collectors to pay. You can provide the debt collectors with a copy of your spouse’s death certificate and ask the company, in writing, to stop contacting you.

If you still continue to have trouble with the collectors, file an official complaint with the bank, and subsequently with the Central Bank of the UAE, if the issue does not get resolved. It’s best to send this information via certified mail and keep a copy of your request for your records.

Given the above, we do not see any issue in your entering the UAE as the bank will have no grounds to prevent this.

It would also be helpful for you to find out if there was any kind of insurance coverage, in case of death, on the loans and credit cards that your husband held. The bank should ideally be able to clarify this to you, including the exact nature of coverage.

I wish you the best at arriving at a suitable solution and navigating through this difficult time.

Debt panellist 3: Alison Soltani, founder of Leap Savvy Savers

Firstly, I offer my sincere condolences to you. This is an extremely difficult situation, both personally and financially, and I hope you find a solution.

Under UAE law, the person or people who signed the loan or credit card application are liable for the debt. This applies to credit cards, mortgages and personal loans.

A deceased borrower’s debts are not passed on to family members unless they jointly took on the debt. This means that you would have had to sign an application, provide a security cheque or agree to be a guarantor.

If the debt is solely in your husband’s name, usually his accounts will be frozen until a court order is granted and all outstanding liabilities are settled. After this time, the remainder of his estate will be distributed to beneficiaries.

You should not be receiving calls or visits regarding the debt and can file a complaint with the bank in question and the UAE Central Bank on the website or by calling 800 CBUAE (800 22823).

I recommend that you obtain legal advice for this matter, particularly if you wish to enter and work in the UAE.

The options you have for settling his estate will depend on whether your husband had life insurance or a will in place. The fact that he owned a business rather than worked as an employee could make the probate process more complex and lengthier, so it would be beneficial to speak with a lawyer.

I would focus on obtaining income to support your family and consider taking out a life insurance policy for yourself to protect your children.

Should you wish to work in the UAE, it may be worth trying to secure employment before entering the country to ensure you can start earning income immediately.

If your husband borrowed money from friends residing in the UAE, it may also be useful to reach out to them and explain your situation to see if you can come to an amicable agreement for repayment.

I hope you and your family find the strength to move through this challenging situation together.

The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to pf@thenational.ae