The Debt Panel: ‘I have cancer and can’t keep up with loan repayments’

The Dubai resident recently lost their job and has almost exhausted their savings with expensive medical bills

Talib Jariwala / The National
Powered by automated translation

I am currently unemployed and have debts worth Dh800,000 ($217,835), which include a home loan and credit cards.

I was working as a finance manager for 12 years but the company underwent a change in management and this resulted in many employees being made redundant.

I informed the bank of my current situation and requested that it not freeze my end-of-service benefits. To my disbelief, the bank ignored my request and withheld my final payment.

Despite my situation, I had managed to pay my instalments on time.

However, I have also been diagnosed with a rare cancer. The treatment is extremely expensive and I have almost exhausted my savings.

This means that I have defaulted on my payments for the past two months. I have made the bank aware of my condition but there is no response.

How can the bank take my end-of-service benefits despite my requests? Can you advise me on what steps I can take to solve my problem, so as I can focus on my recovery from cancer? AR, Dubai

Debt panellist 1: Sameh Awadallah, acting global head of retail banking at Abu Dhabi Islamic Bank

I am so sorry to hear about your illness and hope that you make a speedy recovery.

It is good to know that you have been keeping up with your debt repayments and it reflects a good credit history.

Considering your current situation, I recommend informing your bank immediately about why you have not been repaying your instalments for the past two months and why you will not be able to do so for the time being.

You will eventually default on your current debts if you stop making payments. As a result, you will owe more money as penalties, fees and charges build up on your account.

Reach out to your bank and meet a representative who can help you to explore all the relief options available. For example, you can request a partial release of your end-of-service benefits or shift the due date on your instalments. The bank may also agree to a payment holiday for several months.

In addition, check the details of your loan agreement and speak to a bank representative to figure out if you have “involuntary loss of employment” insurance benefits as part of the original deal. This benefit can help to cover your monthly loan instalments for a few months.

It’s always best to sort things out yourself, but if you’re unsuccessful in negotiating with the banks, you can seek help by registering for the services of a debt management company, which will negotiate with the bank on your behalf to revise the terms and make repayments more manageable for you.

It can also help you with debt counselling and advise you on how to clear your debts faster. Regardless of what you decide, please keep your bank informed and updated on your situation.

Debt panellist 2: Jaya Ratnani, managing partner at Freed Financial Services

We empathise with your situation and understand how challenging it must be for you and your family.

Countless people in the UAE are burdened with large debts and many often fail to read the fine print on the contract when applying for loans.

Whenever you leave a job in the UAE, the bank receives a notification that it is your final salary/gratuity.

Banks have the right to freeze the end-of-service benefits for mortgage customers if they doubt their repayment capabilities and if the loan-to-value ratio exceeds the threshold.

The challenge will only escalate if you plan to relocate or do not have a new job offer.

First, you need to ask the bank not to draw down your loan from the blocked funds and inform it that you are in the process of finding employment. Banks provide a 30 to 60-day time frame in which to submit your new employment documents.

It is important that you stay in touch with your bank to maintain trust and keep it apprised of your situation.

Given your experience as a finance manager, there may be a possibility of finding employment very soon.

New UAE labour laws come into effect

New UAE labour laws come into effect

Once you have a new employment letter and visa stamped, you may ask the bank to unfreeze your gratuity.

If your new salary is lower than the previous one, you can request that the bank reduce the monthly payments to help you manage your cash flow.

The restructuring evaluation will be based on total household income, including the rental income of the property and, if you are married, the income of your spouse. Ensure that you have all the evidence available when discussing it with the bank.

Banks can reduce the interest rate of the loan, increase the loan tenure, provide a payment holiday or reschedule the interest and principal payments.

If you are unable to work because of your medical condition, you could consider selling the property to cover the outstanding liabilities with the bank.

There are establishments in the UAE in which you can apply for financial aid, for example, the Beit Al Khair Society
Alison Soltani, founder of Leap Savvy Savers

If the loan outstanding is more than the property value, you can negotiate a debt settlement with the bank.

If the lender agrees, you can pay less than what is due and settle the loan in full.

There are several factors considered in negotiating a debt settlement with a lender. These include your financial position, cash flow, rental yield, the market value of the property and your repayment history.

If you are unsure of the best option, you can hire a consultant and give them power of attorney, which will allow them to discuss with the lender the best possible solutions on your behalf.

Regarding your credit card debt, if you have subscribed to a credit shield, the insurance company can cover the minimum payments until you find new employment or settle the total outstanding balance.

You will need to check with the bank or read the terms of the contract before requesting this facility.

Debt panellist 3: Alison Soltani, founder of Leap Savvy Savers

I am saddened to hear about your situation and wish you a speedy recovery.

In terms of your end-of-service payment, banks typically use it against debt as a precautionary measure in case the customer cannot continue paying the instalments.

Carefully check your credit card and loan agreement to ascertain the terms of the contract that you signed. If the final salary or change in visa or employment status is detailed in the agreements, it has a right to do this.

However, if you wish to pursue the matter, you can file an official complaint with your bank. If it does not respond in 30 days or you are unhappy with its decision, you can then lodge a complaint with the Central Bank of the UAE through its website or by calling 800 22823.

There are a few options to keep in mind in terms of paying your debts and covering your basic living costs while you continue your medical treatment.

The first point to consider is whether you can earn an income to cover your costs. After three to six months of defaulting on debt payments, the bank could file a criminal case against you.

It is understandable that you may not be able to work full-time. But could you consider working as a freelancer or taking on a consulting role to advise companies about their finances? This would obviously depend on your treatment and how healthy you feel.

If you have a life insurance policy, check to see whether you also have a critical illness add-on.

This would be extremely useful in your case, as it would pay to cover the cost of your treatment and possibly your living expenses while you are unable to work.

I would also advise you to ask your health insurance provider if you are making use of the full benefits and support it offers.

You can apply to your bank for a payment holiday for both your credit card and loan to ease the situation in the immediate term.

Additionally, there are establishments in the UAE to which you can apply for financial aid, such as Beit Al Khair Society. There is a form on its website to apply for financial assistance.

Finally, if you find yourself struggling to pay your credit card and loan and receive the treatment you need, it may be worth looking into the possibility of selling your home or renting it out and living somewhere else cheaply.

If you sold the property, you could use the profits to pay back your debt and return to your home country, particularly if you can receive health care there for a lower cost.

I hope that you can work out the right financial solution, allowing you to focus on your health and recovery.

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 13, 2022, 5:00 AM