The Debt Panel: 'I have lost my job, my son needs surgery and I cannot afford to pay my loan'

The Dubai resident has asked her bank to lower her instalments until she can find another job

Steven Castelluccia / The National

I was working for seven years but lost my job in December 2019. I took out a personal loan of Dh128,000 while I still had a job and paid Dh2,671 in monthly instalments. When I was made redundant, my gratuity of Dh30,000 was used to pay down my loan.

I explained my employment situation to the bank and asked if it was possible to reschedule my loan and pay between Dh800 and Dh1,000 a month. However, they said they could only lower the instalments to Dh1,626 a month, which I cannot afford to pay as I am still looking for a job.

In March 2020, I had to go home as my father was unwell with a heart problem. My son and I could not return to the UAE for another six months because of the Covid-19 pandemic. While I was at home, I contacted the bank to request a payment holiday for six months, but they only gave me three months. Since then, the bank has been charging me late fees and I now owe Dh97,000 on the loan.

My son and I returned to the UAE last August and I am still unable to find a job. I have been in regular contact with the bank to request that they stop charging me late payment fees and to reschedule the loan.

My son has special needs and requires surgery but he is not covered by health insurance. My former husband is paying the rent for us and a friend is also helping us financially sometimes, but it is not enough.

The bank is constantly calling me about late payments and has filed a criminal case against me. The police took my passport but I have managed to have it returned. I have given up answering the bank's calls as they are not listening to me. I do not know how to resolve this issue. Can you advise me on what to do? SE, Dubai

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

I understand that children with special needs require a lot of time and energy. The last thing you want right now is the additional stress of your bank chasing you and not working with you to come up with a practical solution. It is good that you have some support from your former husband and friend.

I do not think people realise how much you put your life and freedom in the hands of a bank when you take out a personal loan. There is no asset backing it, such as a house or a car, so it is literally secured on you and your salary.

Under the Central Bank of the UAE's Targeted Economic Support Scheme, banks are allowed to grant a three-month payment holiday and charge late fees beyond that. But their insistence on a high repayment amount will not ensure they are paid back anytime soon. The people calling you from the bank are probably junior and not empowered to make decisions that could be workable for you.

Try calling the bank yourself and also going to a branch or even its head office and ask to talk to a loan officer who can actually make a decision about your case. Make sure you have all of your loan documents and personal finance information with you, so you can show what amount you can pay.

This really is a very stressful situation to be in after a series of difficult events in your life

Would someone else, such as your former husband, family member or friend, be able to contribute an additional amount every month or guarantee the loan? If the loan was taken out to help pay for your son’s expenses or to pay for joint expenses while you were married, then your former spouse is at least partially responsible morally, if not legally.

If you make no progress with the bank after 30 days of trying, and noting down all interactions, you can then contact the UAE Central Bank's Consumer Protection Department. If you make no progress there or with raising funds, you may have to consider filing for bankruptcy with the courts, which will force the bank to mediate with you.

There are many charities and special needs groups in the UAE that support people of determination. See if you can find some support there. This does not have to be in the form of money – it may be work, support for your child to reduce your expenses, connections for dealing with the bank or finding other parents in similar situations.

You should keep trying to find work – previously struggling industries are starting to turn a corner – but you may also have to consider a different industry or line of work than what you did before. You may even have to consider working in a different country or going back home if you cannot find work in the UAE.

Given that your accommodation is paid for, anything you can raise from part-time or full-time employment can help pay the bank and support your son. Ask family, friends and people in your local community if there is work that you can do.

There are now more ways to earn money online. You can do work by the hour on fiverr.com and upwork.com. You can also be paid for filling in surveys on prolific.co. Try googling for side hustles to find more ways to earn online, although do avoid anything that requires an upfront investment as it is probably a type of fraud.

Debt panellist 2: R Sivaram, executive vice president and head of retail banking products at Emirates NBD

You have been going through challenging times and I empathise with your situation. As a first step, I would suggest you set up an appointment with the concerned department at the bank to have a clear understanding of the amount owed. Inform the bank of your intentions to clear the debt in full and your current financial situation.

It is important to ensure that you are not accruing any additional penalties or charges, so try to work out a mutually agreeable repayment plan, even if it means making smaller payments in the near term.

This will demonstrate your willingness and commitment to clear your dues. Consider selling any assets you may have or obtaining assistance from family and friends to make a lump-sum payment towards the loan, so that the monthly repayments are reduced to a manageable amount.

I hope you are able to find suitable employment at the earliest to reach a stronger financial footing.

Debt panellist 3: Carol Glynn, founder of Conscious Finance Coaching

This really is a very stressful situation to be in after a series of difficult events in your life.

Do you have any savings you can use to contribute towards the monthly repayments? As you have already seen, the penalties and compound interest on the loan will continue to escalate if you are unable to find a way to meet at least the minimum payments.

Alternatively, is it possible for a family member or close friend to lend you the balance and you can then pay them back at a lower amount every month until you find a job?

I would suggest that you formally write to the bank and explain your situation. You will find the complaints email address on their website. Outline in detail, with dates and names, how you have sought to rectify the situation and intend to repay the loan but need their assistance with a lower monthly repayment amount.

Explain how you have tried numerous times to constructively discuss your situation with the bank’s representatives but they have not been helpful. Outline how you are now being harassed on a regular basis and request that they retract the criminal case as you have explicitly expressed your intent to repay the loan.

Make the maximum payments you can afford against the loan. It will help to reduce the interest amount charged and show intent to pay, which will work in your favour with the bank. It will also help should your case be escalated to the UAE Central Bank or the courts.

Regarding your son’s surgery, you can contact hospitals and ask for information about their charitable departments or organisations. Many have funds available to support families in need of medical support.

There are also charity funding organisations such as YallaGive, which may also be an option worth considering.

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]