The Debt Panel: 'I am a single mother worried that my obligations are spiralling out of control'

Since losing her job, the Sharjah resident has found temporary work but on a much lower salary

Steven Castelluccia / The National
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I am a single mother with two children. I was made redundant from my job as an executive secretary at a Dubai company in 2019, where I was paid a monthly salary of Dh9,000 and managed our expenses while my former husband paid the children’s school fees.

He has now also lost his job and can no longer support us. After I lost my job, my children and I moved in with my parents to save on rent.

My father retired in December and moved back to our home country, which means that we are again fending for ourselves. I have managed to find a temporary job but am only being paid Dh3,000 a month. We have downsized to a studio in Sharjah to keep costs down.

However, I have a personal loan of Dh50,000, a car loan and credit card debt worth Dh30,000. I have also borrowed money from friends to make ends meet. I am increasingly relying on my credit cards or money borrowed from friends to pay my debts.

I feel bogged down by all the debt, my children's education expenses and my meagre income. How can I escape this debt spiral? BT, Sharjah

Debt panellist 1: Philip King, head of retail banking at Abu Dhabi Islamic Bank

This is an understandably stressful situation to be in, especially as you are dealing with an unexpected job loss and have children to care for. I applaud you for your continued efforts to remain afloat financially during these challenging circumstances.

That said, there are many measures being taken to reduce the financial burden on people during this time, as well as viable long-term solutions that you can explore to lessen your debt burden.

While cards are typically beneficial for short-term financing needs or emergencies, they could be detrimental in the long-term, especially if not managed properly.

Because you do not feel that you are actually spending money, there is a tendency that you will overspend, which will then lead to huge balances. They also carry high interest rates and fees that make it harder and more expensive to pay off your debt.

It is unlikely with your current salary that you will be eligible for a loan to consolidate your debts

During this time, banks are being highly encouraged to be flexible and understanding of their customers’ circumstances. It is in their interest to resolve your issue promptly and mitigate any risks of default.

It is highly advisable to approach your lenders and explain your current circumstances. Depending on your agreement, you may be able to renegotiate the terms of your loans with reduced interest payments and longer tenures. However, that might prove to be difficult given that your job is temporary and your debt burden ratio might be more than the 50 per cent limit. To provide some temporary relief, you can also request for payment deferrals.

Living with debt can certainly be distressing. Therefore, I highly recommend that you decrease your expenditure as much as possible through stringent budgeting. You could also consider selling your car or other assets to raise funds or even contact family at home for financial assistance during this difficult time.

It might also be helpful to consider other job opportunities that will give you a higher salary, allowing you to be in a better financial position.

Nathan McFarlane, founder of

This is an extremely difficult situation. Finding yourself borrowing and using credit cards to stay afloat is a dangerous position to be in. Firstly, you need to approach the banks to explain your situation.

It is unlikely with your current salary that you will be eligible for a loan to consolidate your debts, so you will need to request a restructuring of your existing liabilities into more affordable monthly payments.

In line with regulations, you should not be contributing more than 50 per cent of your salary towards your debts, which I think you might be doing now.

It is also important to avoid using your credit cards. It will be extremely difficult to move forward if you continue to rely on them because of high interest rates, which will make it harder to escape the financial challenges you are facing.

Debt panellist 3: Felicity Glover, personal finance editor at The National

I am sorry to hear of your plight. The Covid-19 pandemic has affected millions of lives around the world in terms of their jobs and salaries, so you are not alone. It is particularly difficult as a single parent, more so as your former husband has also lost his job.

Have you contacted the banks to discuss your situation with them? They will appreciate your efforts to be honest and committed to paying off your debts. You could also ask them for a payment holiday on your two loans and credit card debt to allow you some breathing space.

I cannot stress enough how important it is to pay down your credit cards as quickly as possible because they carry the highest interest rate – an average of 35 per cent or more a year in the UAE. The more monthly instalments you miss, the quicker the amount owed will balloon to unmanageable levels because of the compounding interest and late charges.

The good news is that you have found a temporary job and downsized your apartment to save on costs. Are there any other expenses that you can cut down on, such as cancelling subscriptions or a gym membership, or catching public transport instead of using a car?

Another option is to consider selling an asset. You mention that you have a car loan. Can you sell the car and use the proceeds towards this loan?

It can be mentally debilitating to face the pressures of debt on a reduced income at the best of times, but it is compounded when you have children to support. It is important to take a step back and try not to become overwhelmed by the situation you find yourself in. Based on your discussions with the bank, set out an achievable plan and budget to help you and your children pull through this.

As a single parent, it can also be hard to verbalise your concerns as you are the only adult at home with children and you do not want to worry them. Do you have a friend you can talk to, who can also be a sounding board for your plan to come out of debt and help to allay your fears?

Finally, as an executive secretary, you have some extremely valuable skills that can easily transfer to a remote job as an online personal assistant.

There are a number of websites where you can search for positions such as Upwork, and flexjobs, which also offers a free downloadable guide on how to find a remote job and start working from home.

This will give you extra income and also allow you to be at home with your children – and you never know, it may lead to a well-paying full-time position that will help you to escape your debt spiral.

However, always be aware of fraudulent hiring schemes and never pay money to recruiters. I wish you all the best for the 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