The Debt Panel: 'I want to pay off my Dh150,000 loan by selling my property in India'

The Ajman resident's bank is threatening to file a case against him and he is worried about leaving the country to oversee the sale of his home

Steven Castelluccia / The National

I was working in real estate marketing with a Dubai company but lost my job last year due to the impact of Covid-19 on business operations. My wife does not work and I am faced with an increasing debt pile. I took out a personal loan worth Dh150,000 in the UAE to buy a property in India and, until recently, had a Dh50,000 car loan.

Although I had some savings to meet rent commitments, we exhausted them very quickly. I don’t have any credit card debt. When our friends couldn’t help us financially, my wife had to sell her gold jewellery.

I managed to pay off the car loan, but the personal loan commitment remains. The bank had given me a payment holiday under the Targeted Economic Support Scheme, but that has also ended.

The bank’s collection agents are now hounding me with threats that they will file a police case unless I restart the loan payments. My job search has been unsuccessful, so I don’t have any income coming in. We are surviving on the bare minimum with the help of friends who lend me small amounts of money every month.

I want to return to my home country but am told that this may not be possible unless I have cleared all my debts. My wife has returned to India and I am staying with a friend in Ajman to keep costs to a minimum.

I need to return to India to be able to sell my property and use the proceeds to pay off the personal loan in the UAE, but I am worried that there might be a travel ban against me. What can I do? DG, Ajman

Debt panellist 1: R Sivaram, executive vice president and head of retail banking products at Emirates NBD

I am glad that you are being conscientious and responsible with regards to clearing your debts. It is always advisable to settle all loans before leaving the country.

As a first step, I would suggest you speak to the debt collection department at the bank to get a clear understanding of the total amount owed to settle your loan.

In parallel, you should also check on the amount you will potentially receive on selling your asset in India to assess if it will cover your debt.

Following this, I would advise meeting the bank representatives to discuss your situation and plan to settle the debt. You could explore issuing a Power of Attorney to your wife to complete the sale of your property in India. This would give you more time to look for suitable employment in the UAE.

Alternatively, if there is a friend or relative in the UAE ready to serve as a guarantor of your loan, this could help your plan to travel. I wish you the very best in finding employment at the earliest so that you may return to financial stability.

Debt panellist 2: Nathan McFarlane, founder of AskHelpWith.com

Many people around the world are in a similar situation and it is clear you are trying whatever is possible to solve this problem by showing good faith in your financial responsibilities − and that will certainly help you.

Unfortunately, collection agents often do not understand your circumstances and are unlikely to listen. The reality is that they are only listening if you are paying.

The best course of action to deal with the agents is to email them all the information that has been discussed in your calls with them as it is important to have everything in writing.

Beyond this, I feel that continuing to try to sell your property in India is the best way forward. Pay off the debt as quickly as possible.

A bank has a right to initially process your security cheque if you fail to make three repayments. Then if the cheque bounces, they can file a case against you.

However, this can be cleared by paying the relevant fine. If it is cleared and the bank has not initiated any civil proceedings at this stage, you shouldn’t have an issue exiting the country. You can check financial travel bans through the Dubai Police website.

Debt panellist 3: Jaya Ratnani, managing partner at Freed Financial Services

Many people have encountered similar adverse situations since the Covid-19 pandemic began last year. It must indeed be a testing time for you and your family, too. The good part is that you have been able to rely on your friends and family during such tough times. Now, if you take the right steps, you can pull yourself out of this situation.

You have done well by disposing of your car loan. And you have also done the right thing by not leaving the UAE. The consequences of leaving the UAE with unpaid debts can be serious.

Additionally, under the arrangement between the UAE and Indian governments, UAE lenders can track you even in India. Had you left the UAE with an unpaid loan, it would have been very difficult for you to resume a normal professional life in the UAE.

To your advantage, you have taken a loan not for consumption but for investing in a property. The good news is that the property market in India has started to recover.

You don’t need to return to India to sell your property. You can issue a PoA to your wife, which will allow her to sell the property and remit the funds to you. You’ll have to get the PoA attested by IVS Global, an authorised body of the Ministry of External Affairs in India.

In the meantime, stay in touch with your bank to maintain their trust. You should keep them appraised of your situation and the progress of selling your property. If there’s any progress on finding a new job, you should also keep your bank informed of that.

Once you have the funds available, you can start discussing a settlement negotiation with your bank. Even if the funds realised from the property sale are less than your debt obligation, you can negotiate a settlement with your bank, such as requesting it to accept a single payment with a waiver or a part payment with a reduced instalment plan. The choice of settlement method will also depend on your job situation.

For example, if you are expecting to find a decent-paying job soon, you have a better chance of settling the debt on more favourable terms. This option will allow you to have some reserves and keep your monthly payments manageable.

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 [e-mail]