I lost my job as a call centre executive in Abu Dhabi in February 2017 after my employer forced me to resign. I was earning Dh6,000 in the UAE but I had to return to India where I now only earn 15,000 rupees (Dh787). When I left I owed one bank Dh17,000 on a loan and credit card and I did not have any savings to pay it off. I'd borrowed the money to pay off a debt to someone else. About five months ago the bank's collection agency started calling me, as well as my family, from different UAE numbers and threatening us. They say my debt is now Dh53,000 and they want me to pay Dh2,000 otherwise I will be arrested in India. They also threatened me with an "Interpol red notice" and even revealed my debt to my neighbours, telling them I had committed fraud. They also say they will send agents to my father's firm and will visit his office. The bank has branches in India and the agent said my debt will be transferred there and that the branch will file a case in India. Can they really do that?
I am not in a position to pay now, nor is my family so will this lead to my arrest in India? I would like to pay but three members of my family depend on this salary. I do not even have one rupee saved up. With no way to pay now, what do you advise me to do? SK, India
Debt panellist 1: Shaker Zainal, head of retail banking at CBI
It is a common practice in the UAE that banks make agreements with external collection agencies and authorise them to collect debt payments from customers on their behalf. Some of these agencies also operate outside the UAE and try to collect overdue debts in the home countries of borrowers if the customer has already left the UAE.
As a first step, it would be prudent for you to validate that the agency is legally authorised to represent the bank, either by asking for documentation from the agency or contacting your bank directly.
Secondly, engage with your bank either directly or through the agency, explain your financial circumstances and ask for a long-term settlement plan. Depending on the terms and conditions of the settlement agreement, the bank may even agree to waive some of the accumulated interest and other charges and come up with a payment plan with an extended maturity. However, it is very likely that you will be asked to make a lump sum and/or regular monthly payment against your overdue debt obligations. Therefore, given your low level of current income, you might want to explore receiving some financial assistance from your relatives or selling any assets you may have in India.
It is possible to file a case in India against individuals with overdue debt liabilities in the UAE, through India-based law firms. The legal proceedings in India would be driven by the UAE's laws and regulations, so seek some legal advice on this separately.
Debt panellist 2: Ambareen Musa, founder and chief executive of Souqalmal.com
Finding a way out of debt is hard enough. Add to that a low income and being the sole breadwinner in the family and it may seem almost impossible to gather the resources you need.
Looking at the string of threats coming from the debt collection agency, it sounds like many of these are baseless. Most of what you hear from the debt collectors is aimed at intimidating you into paying off as much of the debt as possible, and as soon as possible. It may be worth consulting a local legal adviser regarding the legalities and consequences of non-payment of overseas debts. But that being said, it is and will remain your legal and moral obligation to settle the debts you owe to creditors in the UAE.
Since you are trying to deal with your debt situation from overseas, your best bet would be to keep your lenders in the loop. Get on the phone or send an email to the bank with the aim to negotiate and come up with a manageable solution to pay off your liabilities. When you express a keen interest in addressing your overdue debts instead of simply running away from them, the bank may offer some respite by eliminating or reducing the interest or waiving the late payment penalties. Chalk out a repayment plan of action and ask your bank about the best way of actually paying the instalments from India. And most important of all, get everything on record.
When it comes to keeping up with the repayments, given that you're living from paycheque to paycheque on your limited income and zero savings, it will not be easy to cut back on expenses. Instead, you should try to find avenues to make additional money. Think about working overtime, taking on a part-time job or maybe even renting a portion of your house to unlock additional sources of income.
Debt panellist 3: Rasheda Khatun Khan, a wealth and wellness planner and founder of Design Your Life
The effects of unpaid debt can become a very challenging and unpleasant experience. Unfortunately credit cards are one of the costliest forms of borrowing and when payments are not made towards it, charges are applied every month. You have interest, late fee charges, over limit charges and administrative charges, which all increase your balance even further.
The battle between being willing to pay and not being able to afford to pay is a difficult one. At the same time it is extremely important to keep the bank in the loop. Always be upfront and clear as to where you are, your current income and your expenses. Request an affordable repayment option where the card is also frozen and no charges can be applied. This way you will know where you stand and exactly how much is outstanding.
From the bank's perspective, they have a customer who is not repaying their debt and has left the country. Plus, they may have been unable to contact or reach you for some time. The bank, as a business with outstanding dues, will pursue actions required to retrieve their money. In your current position you will need to seek legal advice. A pro bono legal service is something many law firms offer, so find a firm that can offer free advice based on your circumstances. Take any documentation between you and the bank to the meeting.
At the same time if you have any assets, it's time to sell them and reduce your debts. Also be on the look out for ways of increasing your income, whether with another, higher-paid job.
It's time to take action. Get legal advice, sell your assets and find a way to increase your income.
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 email@example.com