The Debt Panel: 'I owe $13,600 on five credit cards'

The Dubai reader is seeking advice on how to pay off the debt after being out of work for more than a year

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I am a 30-year-old man currently working in the UAE private sector. I resigned from my previous job in April last year.

When I left my job, I was meant to receive Dh20,000 ($5,445) in commissions, salary and gratuity from the company. Due to tough circumstances created by my employer, I had to sign the cancellation without receiving my final salary.

My younger brother was also visiting and looking for a job, and I was helping him with his expenses in Dubai.

Due to the delay caused by my previous employer in cancelling my work visa, I was unable to procure permanent employment.

When my visa was finally cancelled in October, I found a job with an organisation that unfortunately ceased operations within a month of my employment.

This meant that I was not paid a full salary. During this time, I used my credit cards to pay bills for groceries, rent and travelling. I also returned to India to get married, which added to my expenses.

I eventually found a job and received my first salary in April. By then, however, I had already started receiving late payments and defaults from the bank.

I now have a debt of more than Dh50,000 ($13,614) spread over five different credit cards. I also owe my friends money.

My current salary is Dh5,000. I pay Dh1,000 a month in rent, Dh500 for groceries and Dh300 in travel expenses.

I am also the breadwinner in my family and have to send Dh2,000 back home for expenses. I am unable to make minimum payments towards my credit card debt and my credit score has dropped from 730 to 440.

Please advise me on what I can do to solve my situation. Should I file for insolvency/bankruptcy? HN, Dubai

Debt Panellist 1: R Deepakchandran, group head of retail products at Emirates NBD

The economy is a dynamic entity that undergoes fluctuations, both positive and negative, which can affect people from all walks of life.

Hence, it is highly recommended to prepare for unforeseen circumstances by planning for difficult times.

When faced with financial constraints, it becomes crucial to carefully evaluate and plan your expenses, while reducing unnecessary spending.

Additionally, exploring alternative job opportunities within or outside the UAE can offer a potential solution to alleviate financial stress.

By adopting a proactive approach and taking advantage of sound financial management, people can navigate economic uncertainty with greater resilience and stability.

While clearing your debt may pose a challenge, it may still be achievable with a disciplined approach.

To initiate the process, it is advisable to contact your bank and explain your current situation.

Given the circumstances, some banks may provide discounted restructuring plans that allow for gradual settlement of your dues over a specific period and will eventually lead to a better credit score.

It is crucial to bear in mind that eliminating debt requires patience and dedication. Stay resolute in your commitment and steadily work towards reclaiming your financial stability.

When it comes to matters of insolvency, you would require legal advice and should contact a lawyer for further information and guidance pertaining to this subject.

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

Even though minimum credit card payments may sometimes seem helpful, they are almost always a mistake in the long run.

Making minimum payments can snowball into a big problem – potentially hurting both your credit score and your wallet.

Before you plan to talk to your bank, you will have to create a summary of your current financial situation. It should include all outgoing expenses and other debts, including credit cards and personal loans. Follow a total transparency protocol.

You will need to prepare a cover letter of your personal and financial situation. This will have to be supported by relevant documents such as your salary certificate, payslips and proof of all other liabilities.

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The next step should be keeping an account of your current expenditure, including personal living expenses, to help the bank understand that you cannot afford the monthly instalment amount.

Approach the bank with all the paperwork and data you have collected to figure out a repayment strategy. Be persistent in your approach by providing all relevant information and data required by the bank.

The request should include converting the amount owed on the credit card into a personal loan at the lowest interest rate.

Most banks are also considerate when it comes to waiving a portion of the interest, subject to appropriate justification and documented evidence. I recommend setting up an in-person meeting with a senior officer at the bank and explaining your situation to them.

Once the payments are cleared at the agreed restructured plan, ask for a no-liability letter.

The bank should notify Al Etihad Credit Bureau in its monthly report about the closure of the card. When AECB receives the rectified data, it will update your credit report, which will lead to a change in your credit score.

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

I am sorry to hear about your unfortunate situation.

Without savings to bail you out, the problem with credit card debt is that a loss of income can have a tremendous impact on the growing balance as the interest compounds.

Before applying for insolvency, there are some options that you could consider.

You could contact your bank to discuss the possibility of taking out a consolidation loan.

These funds would be used to close the credit cards and you would then have one repayment each month, reducing the interest rate.

However, with a poor credit rating, you may not be eligible for a consolidation loan. It is still worth explaining your situation to the bank, as they may provide you with further options.

You mention that you are married and that you helped your brother when he was looking for a job.

Speaking to your wife and extended family and explaining your circumstances might ease the pressure on you. It may be that your wife or brother are able to contribute financially – even just temporary assistance would help you to pay down your debts.

Similarly, you could look at temporarily reducing the amount you send to your home country if there is anyone who could share the financial responsibility.

While conversations with family members about such issues are challenging, it might help you to feel less of a duty to carry all the responsibility on your shoulders.

You can also look at increasing your income through a promotion or taking on additional consulting or freelance work in the evenings or on your days off. It may not be easy but making at least the minimum payments on the credit cards is crucial.

You can also look at increasing your income through a promotion or taking on additional consulting or freelance work in the evenings or on your days off
Alison Soltani, founder of Leap Savvy Savers

It may be worthwhile to explain your situation to your friends and pause the repayments to them. Once you have either a consolidation loan, additional streams of income or an insolvency case, you can look again at paying them back.

Having exhausted other options, filing for insolvency is a possibility.

People can file an application with the court if they have not fulfilled their debt obligations for a minimum of 50 days.

Approach a lawyer in the first instance for guidance. If the court approves, it will appoint a trustee that helps the debtor to enter a maximum three-year settlement plan with the creditors. You will have to disclose all assets and liabilities to the court.

Insolvency can help prevent legal action being taken against you; however, you may be subject to limitations and conditions, such as travel restrictions or the obligation to liquidate assets.

I wish you the best of luck in repaying your debts and working towards a brighter financial future.

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: June 01, 2023, 5:00 AM