The Debt Panel: 'I lost my job and returned home - can I pay my loan from the US?'

The former UAE resident has found a new job but cannot afford the same monthly repayments as she is earning a lower salary

Steven Castelluccia / The National
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I was living and working in the UAE but lost my job in May this year. During my time in the Emirates, I racked up quite a bit of debt.

I have a Dh24,000 personal loan, which I used to pay for my younger sister’s school fees, and a Dh66,000 credit card debt, which includes about Dh11,000 that was stolen from it. I have provided the bank with proof of the fraud, but it has not been deducted from the total amount owing.

For the personal loan, I was paying Dh1,825 a month and making a minimum monthly payment of Dh3,650 on the card. However, I have been unable to make any payments towards my debts since losing my job three months ago.

I have returned home but my company has not cancelled my visa and says it will not pay my end-of-service benefits of Dh25,000 until December. I was planning to use this to pay down my debts.

I have spoken to several bank representatives by phone to explain my situation and request a hold on my repayments. I also followed this up with a number of emails.

They are now threatening to file a legal case against me even though I have given them a copy of my termination letter to prove that I lost my job. While I have found a new job in my home country, I will also be attending graduate school and will not be in a position to afford what I was paying towards my debts previously.

If I pay some money towards the debts in the next two weeks, which is when I receive my salary, will the bank withdraw the legal case? I am also concerned that the bank’s collection department could start harassing the reference I had to give them when I took out the credit card and loan.

If I were to travel to a non-Gulf country, would I be deported to the UAE? It is my intention to pay off the debts but the monthly instalments need to be reduced to match my new salary level. KK, US

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

This is an understandably difficult position to find yourself in. However, I am glad to hear that your financial circumstances are improving, which is a key step towards solving the issue you have at hand.

As a first step, I highly recommend that you reach out to your bank to explain your current situation. They would require that you confirm in writing that you have secured a new job and are willing to pay off your debts, which could potentially put any legal cases on hold.

Due to the current situation, banks are highly encouraged to be more lenient and understanding of their clients’ difficult circumstances.

Therefore, I advise that you approach the bank and see if they can provide you with a payment holiday or postponement on your instalments based on the Targeted Economic Support Scheme, or Tess. This programme is aimed at providing relief for people affected by the Covid-19 pandemic.

Since the situation is still continuing, the programme has been extended to the end of June 2022 to further help people and businesses recover from the pandemic’s lingering effects.

Should you not receive a prompt and satisfactory response, I would recommend that you escalate the matter and put in a request to get in touch with a senior customer relationship manager who can assist you better and provide you with the guidance you need.

In addition, it would also be wise to check if you have any insurance policies against your existing loan and card. Depending on the terms and conditions of your agreement, these policies could cover involuntary loss of employment. In the event that this applies to your case, the insurance could defer your monthly payments for a predetermined period, which would further aid in alleviating your financial burden.

Depending on your debt burden ratio, which should ideally be less than 50 per cent, you could also make a request to consolidate or restructure your debts into a single loan with a lower rate and longer tenure, thereby reducing your monthly payments.

As you are currently pursuing a graduate degree while maintaining a full-time job, it is understandable that your expenses would increase.

However, it is advisable that you reduce your current financial burdens by tracking your spending and implementing a stringent budget to reduce your expenditure. It is also recommended that you seek alternative means of improving your financial situation by looking for other sources of income or liquidating some of your assets.

Debt panellist 2: Nathan McFarlane, founder of

It sounds like you are experiencing a similar situation to many right now. Thousands of people have lost their jobs due to the pandemic and simply don’t have the capacity to pay their debts.

I know collection agents can, on occasion, be difficult to deal with and there is often a lot of misunderstanding in how the collection and legal procedures work.

My first question is what type of legal case are they threatening to file? It is probably based on their procedures that this would be to present the security cheque that you gave when applying for the loan. When they present the cheque and it bounces, they can file a case for a bounced cheque.

As your debts are under Dh200,000, you can pay the fine for this. To check if a case has already been filed, go to the Dubai Police website and click on the “Under Criminal Status of Financial Cases” tab.

Due to the current situation, banks are highly encouraged to be more lenient and understanding of their clients’ difficult circumstances
Philip King, head of retail banking at Abu Dhabi Islamic Bank

The bank can also choose to file a civil case. However, for credit cards with low amounts owing, this is very seldom from my experience, particularly when you remain in constant communication with the bank.

It is advisable to continue to email the bank every month to notify them of your situation and your continuing efforts to solve the problem.

Unfortunately, the collection practices often don’t reflect your communication and good intent and it is something you will have to live with in the interim while you get yourself back on your feet.

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

I am sorry to hear about your financial stress. There are many people around the world in a similar situation to you, even though economies are beginning to reopen.

The good news is that you have started a new job and have an income, even though it is less than what you were earning in the UAE.

It is possible to pay off your UAE debts from another country – your bank just has to agree to the arrangement. To do this, you will need proof of income, such as bank statements, to show them that you have a job and can continue making monthly payments towards your personal loan and credit card debt.

While there is no guarantee that the bank will agree to your request, providing them with a payment plan is also a good idea, as well as requesting that the debts be restructured into one loan with a lower interest rate.

Your biggest concern is the credit card debt, which carries an extremely high interest rate. The amount owed will balloon very quickly if you continue to miss payments because of the compounding interest and penalty fees, so the sooner you can come to an agreement with the bank, the better.

It is a shame that your previous company has not yet paid your gratuity as that could settle your personal loan completely. Under UAE law, companies cannot withhold or delay final salaries from employees after termination. However, they have not yet cancelled your visa and may not have the money to pay your end-of-service benefits, which could explain why they have delayed payment until December.

Have you signed documents saying that you have received your final salary? This is a normal process when you leave a company but employees should not sign it until they have received their final payment. If you feel there is an issue with this, I would suggest that you register a formal complaint against them through the Ministry of Human Resources and Emiratisation's website. Hopefully, this will help to speed up the payment process.

Finally, you will not be arrested if you travel to non-Gulf countries if you have a debt in the UAE. But if your bank has filed a legal case against you, you may face an issue if you return to the UAE.

The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to

Updated: September 01, 2021, 5:00 AM