The Debt Panel: 'I can't get a job to repay my liabilities of Dh98,000'

The RAK resident lost her banking position in January and has been turned down for numerous roles

Illustration by Mathew Kurian

I was born and brought up in Dubai as my father worked here as a banker. In 2010 I started working for a bank as a central operations representative, earning Dh6,205 a month. I was very happy until I was asked to leave in January because my department was being relocated to India. I have been unemployed since then and have had several interviews but no positive response. I have debts I need to repay but without a job or any money coming in I am unable to meet my repayments. My debts are:

Personal loan: Dh64,000

Credit card 1: Dh14,000

Credit card 2: Dh20,000

Total: Dh98,000

I want to return to India, but I need to clear my debts. I am struggling to make the credit card payments and get calls and emails from the bank's collection teams everyday. I am getting by borrowing from friends. I moved in with a friend to reduce my outgoings; this friend is also taking care of my accommodation and food expenses.

The lender of credit card 1 will issue a final notice and if I don't pay up, there will be a court case. Meanwhile the lender of credit card 2 has asked me to pay the minimum amount. I used to support my parents in India but have stopped now. How can I ease my situation until I have a job? FB, Ras al Khaimah

Debt panellist 1: Steve Cronin, founder of DeadSimpleSaving.com

This situation is exactly why building up debts can be so dangerous — you end up in a very difficult situation if you lose your job. I appreciate that Dh6,205 a month does not leave you with much, but if you had built up a cash buffer it would have enabled you to pay all your expenses including loan payments for up to six months.

Getting a job will clearly be challenging but not impossible. Ask for feedback from each company that turned you down.

You are lucky to have such a good friend to cover accommodation and food expenses. Borrowing from friends, however, can put a strain on the relationship — make sure it is clear exactly how you will pay them back and with what level of interest if any. Avoid the temptation to go to a loan shark, as you will never be able to get out of the debt given very high interest rates. Make sure you communicate with your banks so they know you are doing everything to fix your financial position.

You are going to have to do everything you can to get some income. The first priority is to raise enough to cover the minimum payments on your loan and cards. Next will be to pay the cards off fully. There are three ways to generate an income, assuming you have already sold off any assets:

1. Get a salaried job

2. Develop some side hustles

3. Start your own company

Getting a job will clearly be challenging but not impossible. Ask for feedback from each company that turned you down. Make sure you get the basics right: you dress well for an interview, have a well-written CV, can answer questions about your previous employment and can talk about the industry and the company you are applying for. Get a friend to review your CV and practice interviews with you — ask them to be tough!

Create a good profile on LinkedIn and on recruiting websites that cover the Gulf region (or India). Do as much networking as you can, in your community and online, to connect with people who might have jobs to offer. Keep your energy levels up, as sometimes getting hired is a numbers game that requires you to try lots of different options. Consider other industries beyond banking — think what skills you have that would transfer to another industry.

There are more and more ways to get a part-time income these days. See if anyone you know has some part-time work, even if it is a very small one-off task. As an Operations Representative, you have some accounting, Excel and administrative skills. Offer these services to your friends and others in your community, helping them manage their business or sort out their finances. Websites like fiverr.com and upwork.com enable you to earn money by providing services best suited to your capabilities, even if it is doing admin tasks. That way you can find someone in the world who needs what you have. Think carefully and creatively about what you can do that people will pay for.

Starting your own business may sound crazy but someone wrote into The Debt Panel the other week who did exactly that when they lost their job. If you and perhaps a friend or family member have some specialist knowledge or access to products and services that people want, you may be able to start something at very low cost. Be aware though that what might start out as a survival necessity will quickly need to operate under a licensed company if it does start to show potential.

Debt panellist 2: Philip King, head of retail banking at Abu Dhabi Islamic Bank

Considering your banks have sent you several notices, it is important you respond and explain your circumstances. Timely and prudent communications with your banks can make a huge difference in negotiating a reasonable repayment plan that works for you.

Ask your bank to consolidate your debts and negotiate a restructured loan agreement with an extended tenure at a lower rate. Also, request the possibility of availing facilities such as payment breaks or a late payment penalty waiver for temporary relief.

At the same time, run a fine-tooth comb over your existing assets, savings and investments, and consider liquidating whatever you can to raise funds to pay off your borrowings.

The only sustainable solution, however, is to find employment and a regular source of income that allows you to meet your repayments every month. At this stage, you cannot be selective about potential job opportunities and must take the earliest salary-providing opportunity that can enable you to commence your journey out of debt.

Debt panellist 3: Ambareen Musa, founder and chief executive of Souqalmal.com

Unexpected unemployment is a scary prospect. It can be incredibly difficult to pay the bills, put food on the table and keep up with the high cost of living with no source of income. Add monthly loan and credit card payments to the equation and things get even more stressful.

Although it is standard for banks to freeze an account that reflects a final salary transfer or end of service benefits, especially when there's unpaid debt obligations, it appears you haven't faced that issue. And considering you're relying on financial help from friends to get by, it may be safe to assume that you've emptied your account balance and have exhausted your savings.

Until you get back on your feet and are able to get a full-time job, look for part-time or freelance work. Reach out to your friends and contacts to find out where such opportunities exist and how you can be referred for one. No source of income is small when you're struggling to manage your debt and everyday expenses.

Next, make a survival budget for essentials, sticking to the bare minimum, with repaying the Dh34,000 credit card debt your top priority. Your pending dues would have already gone way beyond the original outstanding balance, owing to the high interest rates on UAE credit cards.

Speak to your lenders instead of dreading their calls; be proactive and get in touch with them to work out a solution. Tell them about your unemployed status and assure them of your intention to repay once you secure a job. Remember, you may have to be persistent in your communications with them. As for your personal loan, highlight the fact you've never missed payments before losing your job and are facing genuine financial hardship currently. Discuss the possibility of a deferred repayment schedule.

Also, evaluate how to come up with extra funds. Are there any savings or investments back home? How about approaching a close relative for an interest-free loan to tide you over the next few months? Any help at this point of time would make a huge difference.

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]