The Debt Panel: 'Covid-19 shattered my small business dream and I am Dh150,000 in debt'

The Dubai resident planned to open a supermarket and ploughed his life savings into business

Debt Panel
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I was on the verge of opening a supermarket in the UAE using my savings when the Covid-19 pandemic struck last year, disrupting my plans.

Now, I am left with credit card debt and a personal loan worth a total of Dh150,000. I am unable to pay the monthly instalments because I am not earning an income.

The cheques I issued to my landlord and vendors have bounced and I am worried there might be police cases against me. We have been evicted from our house and my entire family is now on a visit visa because I was sponsoring them. We are temporarily living with my older brother and his family in their apartment.

My wife has a job but she earns a small income of Dh6,500, which is not enough to pay our debt and meet our living expenses. My son has also decided not to go to university because we cannot afford to pay the fees. He is working part-time to help support us.

Can you advise me on what to do? Will my bank be open to restructuring my debt even though I do not have a job at the moment? And would I be able to do this under the UAE Central Bank’s Targeted Economic Support Scheme? AS, Dubai

Debt panellist 1: Philip King, head of retail banking at Abu Dhabi Islamic Bank

The Covid-19 pandemic has affected many businesses and people in the UAE and around the world, leaving them in difficult situations and with unanticipated financial repercussions. For those with outstanding debts, owing money can be a daunting prospect. However, there is a lot being done in the UAE to help businesses and people overcome these circumstances as best as possible.

Given that your cheques have bounced, the bank may file a criminal police case against you, resulting in a travel ban and a pending arrest warrant. Alternatively, the bank may file a civil case against you to recover the outstanding debt. There is no arrest or travel ban in a civil bounced cheque case. However, once the judgment is pronounced, there will be a travel ban.

Therefore, it is highly recommended that you communicate with your bank to understand the status of your situation. In addition, stress your willingness to repay your loans and that you are consistently looking for a job.

Through the Tess programme, banks are protecting vulnerable people during these unprecedented times and helping customers to overcome the financial effects of the Covid-19 pandemic.

If there is a genuine attempt to come to some form of settlement between you and the other parties, it is much less likely that civil proceedings will occur
Nathan MacFarlane, founder of

You should discuss with your bank the possibility of a payment deferral, as well as the consolidation of your loan and credit card debt into a new financial product with a longer tenure and lower financing rates. This will give you some breathing room while you continue to hunt for a job. It will also allow your family to contribute to the repayments.

However, if you have trouble negotiating with the bank, you could look into hiring a legal representative who can negotiate with them on your behalf. A legal expert can reach out to your bank to negotiate a restructured repayment plan and also look into how the UAE's new Insolvency Law can help you out.

It is in the bank's interest to resolve your issue promptly and mitigate any risks of further default, so they are expected to co-operate with you on new repayment terms.

Living with debt can certainly be distressing. I highly recommend that you continue your job hunt, reduce your expenditure as much as possible through stringent budgeting, sell assets to raise funds and contact family from back home for financial assistance during this difficult time.

Debt panellist 2: Nathan McFarlane, founder of

The timing of setting up your business is extremely unfortunate and I feel for you in this situation. You need to know that you are not the only one to face financial difficulty at this time and you must try not to be fearful of your situation as there are solutions to your problem.

Firstly, you need to understand the procedures involving bounced cheques. The banks and vendors can deposit the cheques and file a case against you when they bounce, so I suggest your first port of call is to understand how much these fines could be and if any cases have been filed.

My suggestion is to keep in constant communication with them regarding your situation. If there is a genuine attempt to come to some form of settlement between you and the other parties, it is much less likely that civil proceedings will occur.

With regards to restructuring your liabilities, banks are unlikely to restructure debt unless they know they will receive monthly repayments, so being employed and having a salary is normally a requirement.

This may be an option if you have a job in the near future, which means that you might be able to come to a settlement with the bank over time. Again, it is important to continue to stay in touch with the banks on your intentions and always do so in writing.

The Tess initiative aids people such as yourself, and the terms and conditions that banks should adhere to are readily available on the Central Bank’s website, so this literature may help you in ascertaining whether you are eligible for this.

Debt panellist 3: Felicity Glover, personal finance editor at The National

Owning a small business is a life goal for many people and I am sorry to hear that your plans were disrupted by the Covid-19 pandemic. It is an extremely unfortunate situation that you find yourself in but it is also important to understand that this is not your fault.

Unfortunately, you used all of your life savings to realise your dream and now find that you have no financial safety net to fall back on when you need it the most.

Communication with your landlord and vendors is crucial to avoid added stress and ensure that they do not file bounced cheque cases against you. I advise you to initially speak to them personally rather than trying to do it over the phone. Then, follow up your discussion with an email to put in writing what was agreed upon.

It is also important to set out exactly how much you owe and the estimated monthly payments so as you can work out a budget that also includes daily living expenses.

Fortunately, your brother is helping you with your accommodation, which eases some of the financial pressure. It is also worth considering asking family for financial assistance to help you pull through this, or perhaps you have an asset to sell, such as a property back home.

While this might be a difficult decision to make, particularly if it is your family home, it is the quickest solution to bring you out of debt and prevent bounced cheque cases from being filed against you, allowing you to eventually get back on track financially.

In the meantime, I also suggest that you continue looking for a job. If you were planning to open a small business, then I can only assume that you have many in-demand skills required in today’s job market. You could also consider applying for remote jobs on websites such as and

It is worth asking your bank if you can restructure your debts under the Tess programme, but until you find a job, they may be reluctant to offer you this option. However, what you can do is officially request a payment holiday under Tess, which should give you some breathing space to find a job and start earning a regular income again. I wish you all the best and hope that one day you will still be able to achieve your goal of opening your own business.

Updated: July 11, 2021, 6:24 AM