The Debt Panel: 'I am bankrupt and can't sell my property'

The Dubai resident is struggling to keep his business afloat and has debt of $272,294

Talib Jariwala / Getty

I have been in the UAE for 30 years and took over a textile trading family business.

It was highly profitable and I decided to invest in the real estate sector. I bought a property and took out a home loan against it.

As a result of unexpected circumstances, my business suffered a decline in profits. It continued to worsen during the coronavirus pandemic and I became bankrupt.

I am in a dire situation and cannot keep up with my financial obligations. I have an unpaid mortgage and a total debt of Dh1 million ($272,294).

The property value is now Dh600,000 and I’m unable to sell the house to settle the bank loan. I am struggling to revive my business and have decided to return my home country, along with my family.

I have limited funds and do not know how to solve this problem. Can you advise me on what I should do as the banks have filed a case against me? BA, Dubai

Debt panellist 1: Steve Cronin, founder of

This is a serious amount of debt, and you need to act quickly to stay in control of the situation. The banks may well have filed for a travel ban to be imposed on you — in which case, you won’t be able to leave the UAE until your debt is resolved.

Investing in property can be challenging because prices are more volatile than people expect and it is not a liquid asset: you cannot sell it and convert it into cash quickly. If someone loses their job or, in your case, your business, a mortgage can tie you down.

It’s not quite clear what has happened here, whether your property has crashed in value or you have debts from your business and personal life on top of the mortgage.

House prices are moving up now, which should take some pressure off, but you will probably have no choice but to sell the property. If you cannot keep up with the loan repayments, then the bank will repossess your property.

If you have an Islamic mortgage, the house officially belongs to the bank until the end of the loan and it may not give you permission to sell it.

You need to engage with the bank to see what is possible and try to talk to some senior decision makers at head office rather than random employees on the phone from the collections department. If this fails, you may have to go to court and file for personal bankruptcy.

Short of leaving the country, do you or your spouse have any income-generating capacity at all? Can you get a job, so the bank can see a salary coming in? Does your company have any assets remaining or have they all disappeared to creditors? Does it have a client base that another company could benefit from in a purchase?

The business environment is slightly easier now than in the previous two years, so there may be opportunities for you out there as a consultant or contractor, or in reviving your business somehow with a partner.

You need to avoid businesses that requires upfront investment, such as textiles, as you do not have the debt capacity or the cash flow to keep it running.

Debt panellist 2: R Sivaram, executive vice president and head of retail banking products at Emirates NBD

You have been going through a series of unforeseen life events that have put you in this predicament.

As a first step, connect with your bank’s loan department to explain your situation and request help with reviewing the terms of the mortgage to lower your monthly instalments by extending the term of the loan.

Ask the bank if there are instalment deferral options available which could provide short-term relief. You could also consider renting out the mortgaged property and assigning the rental income towards your home loan. This could give you some temporary relief.

You should also try to find some level of income through employment and reduce all expenses to a minimum.

The case against you may complicate your plans to return home, so it is wise to check with the police if there is a travel ban issued against you
Carol Glynn, founder of Conscious Finance Coaching

Your responsibility is to take action on everything you can do right now. This includes staying in communication with your bank/creditors and ensuring that everything is in writing to show your good intent.

If you have savings in your home country, evaluate if there is a possibility of using some of that to reduce your exposure in the market.

While I do understand your situation of not having a source of income and the value of your loan being higher than the property's value, you could still discuss with the bank how it can help you with the sale of the property.

The loan is accruing interest every month and given that the bank has filed a case, you need to resolve your financial situation before you can look at leaving the country. Try all means available to reduce your liability while working on a solution to pay back the remaining amount.

It is important to understand that there may not be an overnight solution to your problem and coming to a resolution will take time. I wish you the best at arriving at a suitable and speedy solution to the issue.

Debt panellist 3: Carol Glynn, founder of Conscious Finance Coaching

I am sorry you have found yourself in this situation. It is not an uncommon story as many businesses have struggled to survive in recent years.

Is the property rented out to tenants? If not, I would recommend renting it as soon as possible. Ideally, the rental income will cover your mortgage costs.

I would also recommend speaking to your bank about refinancing the home loan. If you can reduce it to match the rental income, it will allow you to keep the property until the market value matches the debt. If you can keep it for the long term, you will eventually be able to have a source of income from the rent.

It is best to communicate with the bank before you return home. Will you work in your home country? If you can show the bank that you will have an income in the future and intend to repay, it will be more likely to work with you to find an arrangement in your favour.

The case against you may complicate your plans to return home, so it is wise to check with the police if there is a travel ban in place.

Alternatively, you can negotiate with the bank by seeking to reduce the debt to match the resale value of the property. You will then sell the property and the proceeds will clear your debt and close the case against you, allowing you to leave the UAE debt-free.

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: April 06, 2022, 5:00 AM