Debt and Married Couples in the UAE

Debt and Married Couples in the UAE

Family Law – UAE and UK

Over the years, the UAE has built up quite a strict reputation in terms of how it deals with people who find themselves in debt. In this day and age, many of us find ourselves with credit cards, car loans and even mortgages which, given an unfortunate set of circumstances or a number of poor decisions, may leave us in debt. 

If you’re married, or soon to be married, what are the implications of this debt in terms of your partner being liable also? Or what if your spouse has run up some debt – how does this affect you? 

Questions are often raised about what happens to an individual debt when a couple marry and whether it then becomes a joint debt.

In the UAE, the person whose name the debt is in will be liable for the debt. The spouse will only be held accountable for the debt if he/she signed as guarantor or presented a security cheque to the bank/creditor in respect of that debt.  

In the case of credit cards, the primary cardholder is liable for all debts and therefore even if the spouse is a secondary cardholder, it is ultimately the primary cardholder’s responsibility to discharge their obligations to ensure that all payments are made so as not to incur debt. 

In the event that the money is not recoverable through the person who took the loan or facility, the bank/debt collection agencies may try and contact related persons, such as the spouse. However, the debt remains that of the person whose name it is in. It is important to be aware that the spouse is not legally liable for their husband or wife’s debt.

Following a divorce, if a husband is liable to pay money to his wife or the children and disobeys a Court Order in the UAE, the wife can seek an Execution Order from the Court for her husband to honour his monetary obligations to the family. In this case, the husband can be ordered to pay the wife the monies due, including backdated payments, or he can even be ordered to make payments to the Court’s Accounting Department. If the husband breaches the Order he could face imprisonment until he arranges payment of the money due or gives a guarantee to the authorities that the payment will be made.

If the person whose name the debt is in passes away, the debt would not be passed to the surviving spouse. It would need to be paid out from the deceased’s estate before any monies are distributed to the surviving spouse or heirs. If, however, any assets are owned in the joint names of the spouses, the surviving spouse would be liable for any debt on the jointly owned asset. For example, if real estate is owned jointly subject to a mortgage and one spouse dies, the surviving spouse would be liable for the outstanding debt – it is therefore vital to ensure adequate mortgage protection insurance is in place.

As the above is only an overview, should you require specific advice with regards to debt and the family whether it be during a marriage, following separation or divorce or following the death of a family member, please do contact us.

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