What Procedures are Involved in favor of Debt Recovery?

Preliminary stage:

A creditor has the right to issue a pre-action letter. This letter is significant as it sets out the marvelous obligations of the debtor. This pre-action letter sets out a harsh deadline for reimbursement of debt and sometimes a provocation to meet and converse and reach into a settlement.

Amicable settlements

What negotiations can be made?

A negotiation with the debtor is the superlative attempt to reach into an amicable settlement before resorting to any litigation. Both parties must work meticulously to assess and reach a communally acceptable resolution. The debtors could also end up paying late fees or interest on outstanding debts after the settlement.


The parties might choose for arbitration in order to resolve the disputes that are related to debt recovery. The arbitrator has the sense of hearing the evidence brought by both sides plus makes a decision which is obligatory on both the parties.

Reliefs provided in the settlement

Ø  Providing extended payment terms

Ø  Offering discount

Ø  Reducing the debt amount 

 Judicial proceedings in debt collection in Dubai:

Debt recovery by court procedure is an additional option to declare outstanding dues. A creditor can file a civil case concerning debt collection in Dubai which might ensue with normal litigation before the court.

Reliefs provided by the court for creditors:

Ø  Attachment of debtor’s movable property

Ø  Attachment of stocks and bonds

Ø  Sale of real estate property 

Risks involved in debt recovery:

When considering the debt recovery process, one must also think about the following facts:

Ø  Impact of delay and cost

Ø  Risk of not achieving a positive outcome

Ø  Considering the financial status of the debtor.

Preventive measures

Following measures should be considered before providing a debt recovery facility:

Ø  Having a well-drafted contract and strong credit control

Ø  Addressing the payment terms and conditions

Ø  Including dispute resolution clauses can avoid lengthy dispute procedure later on.