The Debt Panel: American absconder wants to pay off his liabilities with assets he left behind

The former UAE resident, who relocated to Japan to avoid a pay cut, has a car and is owed his gratuity

Illustration by Mathew Kurian

Last year my UAE employer informed me that all employees were being offered a 25-40 per cent pay cut otherwise they would face termination at the end of the contract. This happened to other employees in my company and those with debt were detained at the airport. I therefore decided to leave the UAE seven weeks ago - relocating to Japan - before the salary reduction became official. 

The debts I left behind are:

Credit card 1: Dh7,200

Credit Card 2: Dh11,000

Loan: Dh302,000

Traffic fines: Dh12,900

Total: Dh333,100

I borrowed the money to buy a car as well as to pay down liabilities elsewhere and make smaller purchases throughout the years. Since leaving I have maintained my payments, but am considering stopping to initiate a quicker resolution. When I left I was earning Dh24,500 as a private consultant. My company owes me an end of service payment of somewhere between Dh150,000 toDh200,000. It is difficult to calculate the exact amount as it is over a 12-year period and there are various factors involved. I would like to settle my debts but want to negotiate after my gratuity is applied so that I know exactly how much remaining is owed. Ideally, I would like the gratuity payment to go towards the debt and lower the total payment owed. Will this happen automatically after a police case is filed? Or is it possible my company will not pay my gratuity?

If the bank applies for a travel ban against me, would this be for the total amount of the initial loan (Dh400,00) or the remaining debt, subtracting the gratuity. I also have left behind a car – a 2009 Toyota Camry worth approximately Dh10,000 to Dh14,000 - will this go against any debts too? In terms of severity of potential punishment (travel bans) should I place priority on repaying traffic fines or debt? I am only worried about international travel bans and not local travel or employment bans. I am American and have no plans to return to the UAE but I do not want this hanging over my head for the rest of my life. JC, Japan

Debt panellist 1: Shaker Zainal, head of retail banking at CBI

Firstly, get in touch with your employer and check on the end of service amount, payment procedures and when you should expect to receive the payment. In the meantime, it is crucial that you continue to make your monthly instalments to the bank. If you fail to do so, the bank may initiate legal action against you, which would escalate your problems and costs.

Once you have received your gratuity, engage with your bank, explain your financial situation to them and explore the feasibility of agreeing on a settlement plan. Beware that if your loan was a “Salary Transfer Loan”, depending on the terms and conditions of the loan agreement you have signed with the bank at the time of drawdown, they may put a hold on your end of service payment as soon as the amount is credited to your payroll account. This would be used against your outstanding debts to the bank.

In the meantime, try selling your car by giving a power of attorney to one of your friends in the UAE, if the car does not have any outstanding vehicle mortgage on it. The car cannot be automatically settled against your loans, unless there is a vehicle mortgage.

Aligned with your thinking, it would be prudent to clear all the debts you have, and resolve these as quickly as possible to avoid the accumulation of overdue payments and interest charges, so that you do not face any negative repercussions for the future. Also, do not assume that remaining outside the UAE will provide you with immunity; some banks authorise external agencies to collect debts from customers on their behalf, even if they currently reside outside the UAE.


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Debt panellist 2: Keren Bobker, an independent financial adviser with Holborn Assets

As you have not missed any payments so far, the bank will not have registered a police case. You need to miss three repayments before they have grounds to take this action. If they are aware you have left the country, they could request an immigration ban from the courts; this means you would be detained on attempting to re-enter the country. The liability is for the amount owed.

It is not clear whether you left with the knowledge of your employer; if your visa was cancelled or the employer marked the last payment to you as ‘final salary’, your UAE bank account would be frozen.

Calculating a gratuity is not complicated and there are specific guidelines to be followed. It is clear from Article 134 of UAE Labour that that: “End of service gratuity shall be calculated on the basis of the last wage." This is the basic salary only, not including any benefits. For the calculation we refer to Article 132 and this states: “The worker having spent one year or more in continuous service shall be entitled to an end of service gratuity upon the termination of his service. The days of absence from work without pay shall not be included in the calculation of the period of service, and the gratuity shall be calculated as follows: 1. The wage of 21 days for each of the first five years of service.  2 - The wage of thirty days for every additional year.” A basic salary altering over time is not relevant as only the final basic figure should be used in the calculation.  This sum should be paid at the time the employment is cancelled as you have to sign documentation then. If you have already signed to say monies have been paid, this weakens your case if you need to pursue the employer for non-payment.

It is standard practice for most banks to apply the gratuity payment against outstanding debts, especially if a customer has left the UAE or is behind with payments. You can then renegotiate the debt.

You have a car that you have left behind and it is possible for the bank to make a claim and arrange for it to be sold at one of the police auctions; this is harder if finance is not secured on the vehicle.

A UAE bank cannot organise any kind of international travel ban but you need to be aware that some banks will engage international debt collectors and these operate in multiple countries. Just leaving the UAE does not mean that a person will not be chased to repay outstanding debts.


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Debt panellist 3: Steve Cronin, founder of

By having significant amounts of debt you made yourself vulnerable to anything going wrong – which it did when your employer cut everyone’s pay. You have complicated things by absconding but, if you have a well-paid job in Japan, you should be able to pay off the debt fairly quickly.

Stopping your payments is unlikely to improve the situation and a police case will do you no favours. A local travel ban is irrelevant given you have left, but would be for the total outstanding balance in case the gratuity is not paid. The bank is more likely to negotiate if you have a clean payment record and a clear plan for paying off the debt.

While making the regular payments, you must first try to pay off the credit card debts. These are not large balances but they will grow fast. The traffic fines will not grow like the card debt but could cause an alert if you re-entered the country.

Ideally, talk to your bank now and explain the situation. If the balance is based on years of interest on interest then they may be willing to reduce it. Only they can decide if they want to accept your car as part payment, and the longer it is neglected the less they will it accept for it. They are likely to freeze your account and if the gratuity is sent to it, the money will automatically be taken to reduce your loan balance.

To ensure you get your gratuity, stay in regular contact with your former company’s HR and finance departments. If there is any hint it will not be paid in full or on a timely basis, make it clear you will be pursuing legal action.

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