Debt Collection & Bounced Cheque Law in the UAE – 2025 Update

Bounced Cheques and Debt Collection in the UAE – What You Need to Know in 2025

In the UAE, the use of cheques in business and personal transactions is still very common. However, when a cheque is disho—especially due to insufficient funds—it often causes stress, confusion, and even legal disputes. At Rashid Alnaqbi Advocates & Legal Consultants, we regularly assist clients in dealing with bounced cheques and recovering unpaid debts through proper legal channels.

Here's what you need to know about the current law and how debt collection is handled in 2025.

📌 Understanding the Bounced Cheque Law Reform

The UAE government introduced major legal reforms in recent years aimed at decriminalizing minor cheque bounce cases while still protecting the rights of those owed money.

Under Federal Decree Law No. 14 of 2020, which remains in effect through 2025:

• Most bounced cheque cases are no longer criminal unless there is clear fraudulent intent.

• If the cheque was issued from a closed account, or if the issuer stopped payment without legal reason, criminal charges may still apply.

• In all other cases, the matter is now handled civilly, allowing faster and less confrontational dispute resolution.

⚖️ Legal Path to Recovering Your Money

If someone gives you a bounced cheque or refuses to pay a debt, you have the right to pursue recovery through civil legal procedures. Here’s how debt collection works legally in the UAE:

✅ Step 1: Send a Legal Notice

The first step is to have a law firm issue a formal legal notice to the debtor. This shows you are serious and often encourages quick settlement.

✅ Step 2: File a Civil Case

If the notice is ignored or rejected, you can file a civil lawsuit in court to demand payment.

✅ Step 3: Apply for Execution

Once the court gives a judgment in your favour, you can request execution of the judgment, which may include:

• Freezing the debtor’s bank accounts

• Placing a travel ban

• Seizing assets or deducting from salary

In the case of a bounced cheque, you can often skip the lawsuit entirely and go directly to the execution stage, thanks to the updated laws.

What if You Are the Cheque Issuer?

If you're the one who issued a cheque that bounced:

• Cooperate and respond quickly.

• Offer a payment plan or settlement if possible.

• Do not ignore legal notices—it will make your situation worse.

• Speak to a lawyer to help protect your rights and reduce your liability.

Avoid These Common Mistakes

• Don’t issue cheques without confirming funds.

• Don’t rely on verbal agreements—always document transactions.

• Don’t try to “solve” the issue by delaying. The law offers clear solutions—but time matters.

📞 We’re Here to Help

Whether you're a business owner chasing unpaid invoices or an individual involved in a bounced cheque situation, we can guide you through the legal process of debt recovery in Dubai and across the UAE.

✅ Professional legal notices

✅ Representation in civil courts

✅ Execution of judgments

✅ Negotiation and settlements