The Debt Panel: 'Can I work in Saudi Arabia with unpaid debts of Dh150,000 in the UAE?'

The Indian absconder left the UAE in 2015 and has now been offered a role in another GCC country

Illustration by Mathew Kurian

I have an outstanding debt of Dh150,000 from two different banks in the UAE. However, I left the Emirates in 2015 after losing my job as an assistant manager in Dubai working for a private sector firm. The debts I left behind are:

Personal loan 1: Dh80,000

Personal loan 2: Dh70,000

I borrowed the money to pay for my father’s liver surgery in my home country of India. Until I left the UAE I was repaying the loans, but since then I have not made any payments. The banks have never come after me for the money either.

I have now been offered a management position in Saudi Arabia with a salary of 15,000 Saudi riyals (Dh14,691) working for a watchmaking company. I am considering accepting it, but can I enter the GCC if I have outstanding debts in Dubai? I never intended to default on my UAE liabilities; it was simply due to losing my job. I am currently running a shop in India. Should I accept this position in Saudi Arabia or not? AI, India

Debt panellist 1: Keren Bobker, an independent financial adviser with Holborn Assets

I note you have not made any repayments on these loans since you left the UAE in 2015, so the amount currently outstanding is likely to be significantly higher now due to accumulated unpaid interest.

It is curious the banks have not pursued you for these debts, so did they have any contact details for you? I assume your intention is to repay the money you borrowed once you start receiving the salary in Saudi Arabia therefore it would be sensible to contact the banks now to find out what is owing. Also, ask if they will suspend any additional interest when you restart the repayments.

There is not a set answer as to whether the debt can follow you to Saudi Arabia but it is possible. You first need to establish if there is a police case against you in the UAE. The banks you owe the money to should be able to tell you this. Alternatively, engage a lawyer to find this out for you as the police no longer provide this information to third parties. If there is no outstanding police case, there will be no issue in entering Saudi Arabia for work.

If there is a police case against you, this might be an issue as GCC countries co-operate with each other but it varies by case and there is no certainty either way. Generally, the smaller the debts the less likely there are cross-border problems. In this case, it is unlikely you would be prevented from entering Saudi Arabia but if you have concerns you need to obtain clarification by contacting the banks and also possibly engaging a lawyer to check on your behalf.

Debt panellist 2: Shaker Zainal, head of retail banking at CBI

Banks in the UAE are able to pursue legal action against borrowers, who have left the country with unpaid debts, either in the home country of the borrower or elsewhere. This is carried out mostly through debt collection agencies. Therefore, leaving the UAE without agreeing on a settlement with the banks is never the right course of action.

In your case, it would be advisable to get in touch with your banks first and try to agree on a settlement. This will definitely be considered as a sign of goodwill from your part and they may even agree to waive some of the interest and late payment charges you have incurred since 2015.

Having agreed to settle your overdue loans with the banks first, you can then have peace of mind in taking up a new job in Saudi Arabia. You should be able to fully pay back your debts within a reasonable period of time with your new salary, and the banks might even go as far as giving you a reduction on the total amount you owe them, as part of the settlement.

It is also possible that a police case may have been filed against you in the UAE because of your overdue payments. Settling your debts with the banks will help to resolve the police case — if one has been filed — enabling you to travel to the UAE without a ban in the future.

Debt panellist 3: Rasheda Khatun Khan, founder of Design Your Life

Being financially overexposed is a huge burden in itself. The effects of being made redundant can leave people in financial despair, especially if they have not planned for unforeseen circumstances. Having an emergency fund is a fundamental part of any financial plan, as it is there to protect the whole family. For those unable to find new employment after job loss, not having a buffer in place may see them leave the UAE as it did in your case.

So what happens to your debts? Well, these are still your responsibility. You have a legal obligation as set out in your loan agreement to repay the amount borrowed under the given terms. Leaving the country does not mean that obligation no longer applies. The fact the bank has not yet contacted you does not mean that they won't or that they have not already taken any action.

In addition to your financial obligation, consider your moral obligation. Knowing you legally owe money sits somewhere in your mind and until the liability is repaid there will be an unsettling feeling roaming around. It may appear much easier to let it slide, but ask yourself are you really OK with that?

I recommend you contact the banks and offer a repayment plan ensuring the instalments are actually affordable for you. Also find out how far your lenders have already escalated your case. Settle the issue with the bank with your payment solution and if the job opportunity in Saudi Arabia is right for you, you should consider going for it. Learn from past decisions to help you shape your 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 [e-mail]