The Debt Panel: 'I fled the UAE in 2010 without clearing my credit card. How do I return?'

The former sales executive now wants to pay off his debt and take up a new job in the Emirates

Illustration by Mathew Kurian

I left Dubai in August 2010 due to health issues and because the market for my sector was in recession. At the time I was working in sales, earning Dh3,000 a month. I have stayed in India since then as no suitable job opportunity has come up. However, I now want to take up employment in Dubai once again as the job market in India is very poor. The issue, however, is that when I left I had a credit card with an outstanding balance of Dh4,000. I did not intend to leave this debt behind, but I was in difficult circumstances at the time.

If I now want to return, what are the procedures I need to go through to make the payments and how much will I have to pay?

I am ready to pay the debt but it will have to be in instalments as I am very poor and have no other source of income outside my salary. Will I be required to pay the outstanding (which was Dh4,000 when I left) plus interest when I take up the job – or can I reach a settlement with the bank? My current salary in India is Dh800 a month, working in sales. What steps should I take now? UK, India

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

Before leaving Dubai in 2010, you really should have paid off the outstanding balance on your card. You were earning nearly four times what you do now and could have saved for a few months to ensure you left the country in a debt-free position. Before returning to the UAE you should make contact with the bank holding your card and repay the Dh4,000 you owe.

It is difficult to calculate the total fees accrued as these vary from bank to bank. However, given that you left eight years ago, and have not made any payments since, it could be a high figure. If so, you should attempt to negotiate with the bank to find a fair compromise to ensure that you can return to the UAE in a financially stable position.

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

I assume you have not been in contact with the bank or made any repayments since you left the UAE. Although the balance was Dh4,000 when you left over eight years ago, interest will have been added and due to lack of any payments there are likely to be penalties as well. Therefore,  the total amount now outstanding is likely to be significantly more. Only the bank itself will know what the balance is so you must make contact to find out and start a discussion.

If there has been no communication and no payments there may be an outstanding police case and this may be registered with immigration. This means you may not be able to enter the UAE, but again, the bank will know if there is a police case.

A bank should be willing to enter into a discussion with a debtor and it may be possible to have some of the interest and penalties waived but they are likely to ask for a lump sum payment as a goodwill gesture before they agree to reduce the interest and set up a revised repayment plan. Either way you need to contact them to ask what is possible.

I suggest requesting they waive or reduce the interest, which will be significant, and offer an amount you can afford to repay each month. You need to be fully aware that you will need to reach out to the bank and make them an offer. Ensure that everything you agree is confirmed in writing.

Once you reach an agreement and several payments have been made, the police case can be lifted and any immigration ban with it too.

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

Leaving your debt unpaid in the UAE can come back to haunt you in more ways than one.

Let's consider the worst-case scenario. Your unpaid credit card debt may have resulted in the bank filing a police case against you. If this is the case, you could get detained or arrested at the airport when entering the UAE. Did you also sign and submit an undated security cheque at the time of applying for the credit card (as is required by some card providers)? If the bank  deposited this cheque and it bounced due to insufficient funds in your bank account, you may also be liable to pay a fine.

Now moving on from legal to financial repercussions. You left your credit card debt behind over eight years ago. That means your debt won't just be limited to the original outstanding balance of Dh4,000. Add to that eight years worth of interest, which would be a whopping sum owing to the extremely high interest rates on credit cards in the UAE (close to 40 per cent per annum). Then there are the monthly late payment penalties that would have accumulated over the 100 months you've missed making your repayments. Long story short: your total debt would have multiplied and become much higher by now.

Your best bet would be to initiate communication with the bank before you decide to come back to Dubai. Explain your financial situation to the card provider, the circumstances that forced you to leave the debt behind and your intention to repay what you owe to them. Figure out how much you can afford to repay every month, and stick to it during your negotiations. You could also ask the bank to waive the late payment penalties and some of the interest in exchange for a partial lump-sum settlement. But this means you may have to tap into your savings in India or rope in your family members to help you out financially. Once you reach a final agreement with the bank, make sure to get it in writing and keep a record of all communication with the bank in this regard.

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]