When an individual cannot pay his debts, throwing him into prison will not help. But that is what happens too often. The result is that people in serious financial trouble have an incentive to flee the country, leaving their debts behind. There must be a better way.
The Business section of The National today reports on an unforeseen consequence of the way people snapped up unbuilt flats at the peak of the market. Now their properties are ready and mortgages are taking effect, but real estate values have fallen so sharply that they have lost money. The result is genuine financial distress for individuals and families.
"Underwater" mortgages are a problem in some other countries, too, but in the UAE the issue is more serious because of the relatively transient population - many expatriates might find it easier to leave abruptly than to resolve their obligations.
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