The Debt Panel: 'I lost my job 14 months ago, so how do I clear the Dh110,000 I owe?'

The Dubai resident from India, who has lived in the UAE for 26 years, is struggling to find a new position in the hospitality sector​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Illustration by Mathew Kurian 

I owe Dh110,000 on two credit cards and until recently was paying the minimum amount every month. I was made redundant from the hospitality sector last year when my employer restructured and I have been without a job for 14 months. Before losing my job I was earning Dh18,000.

I have been trying to find a job but it's taking longer than expected. I built up the debt paying for everyday expenses and by withdrawing cash to pay rent.

When I was made redundant, I approached the bank for credit shield insurance and was told the insurance company would pay Dh48,000. However, I was later informed that I need to be on a company visa to take advantage of this. This did not seem logical to me as I had been made redundant so how could the company keep me on their visa?

My debts are:

Credit card 1: Dh80,000 (Dh3,600 minimum payment)

Credit card 2: Dh30,000 (Dh1,800 minimum payment)

Total: Dh110,000 (Dh5,400 in minimum payments)

I later approached my lenders for a settlement plan, asking if I could only pay the principal amount and not the interest. They asked me to pay a higher amount on a monthly basis for one year, which I could not afford.

I have been trying to find a job but it's taking longer than expected. I built up the debt paying for everyday expenses and by withdrawing cash to pay rent. For the last year I have relied on family and friends to survive. I also support family in India. My expenses come to Dh16,000 and include Dh4,000 for rent, Dh1,000 for petrol, Dh5,400 for credit card payments and Dh4,000 for personal expenses. 

Now I have defaulted on the payments for the past three months as I have no source of income. The bank now says it will file a legal case against me. I have spent 26 years in UAE and in the past I have always been a bank customer who had no debits et cetera. What should I do? GP, Dubai

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

You are taking the right steps by keeping your lenders informed about your situation, as it exhibits you are financially responsible towards meeting your financial obligations.

With the current economic slowdown and job market tensions caused by the global pandemic, the UAE has implemented debt support measures and relief to help the community prioritise meeting their living expenses, as well as immediate financial commitments. With that being said, the Central Bank of the UAE announced its Targeted Economic Support Scheme, which was boosted to Dh256 billion, including deferral of loan principal and interest payments, which allows banks to grant temporary relief for loan payments until the end of the year.

Given these circumstances, banks are being encouraged to co-operate and support their customers. It is advisable to contact your lenders and discuss repayment options or temporary relief that can be offered to you in light of above developments. Explain to them the circumstances of your default and reinstate your commitment to repaying the debt once you secure a job.

Alongside your efforts with your banks, consider decreasing your expenditure as much as possible through stringent budgeting, or liquidating any of your assets, or even contacting family from back home for financial assistance.

Debt panellist 2: Ambareen Musa, founder and chief executive of

Surviving in the UAE without any source of income sounds incredibly difficult. And in your case specifically, the cost of living, visa sponsorship and debt commitments have forced you to rely on friends and family to get by. This is not a sustainable plan for the long term.

Let's address your credit shield claim first. Credit shield provides insurance coverage to repay your outstanding credit card balance in case of unforeseen and involuntary unemployment, among other benefits. However, this involuntary loss of employment (ILOE) benefit comes with a long list of terms, conditions, limitations and exclusions. For example, redundancy must not be a result of misconduct, underperformance, exceeding holiday allowance et cetera. You must also be on a full-time permanent employment contract, and should have been employed for at least six months under such a contract.

Ideally, you should check the credit shield terms and conditions under your credit card to understand the exact details of coverage. Ask the bank for a copy of the benefits schedule under the credit shield product you had signed up for. If you still feel you've been unfairly denied the benefits, you can approach a legal expert to take a look at the credit shield contract and lodge a complaint with the central bank.

On the employment front, this is undeniably a difficult time to find a new full-time job. The hospitality sector is among many others to have been financially affected by the coronavirus pandemic. However, you could look for part-time or freelance work to start earning some cash to pay down and settle your credit card debts.

If all else fails, you have the option of declaring bankruptcy under the UAE's new insolvency law. However, the provisions under this law come with their own terms and conditions. For instance, debtors can request a court-approved repayment plan only if they're about to default on their monthly payments or have missed a repayment within the last 40 days. A legal counsellor can help you navigate this. You can approach the Indian consulate and the Indian Workers Resource Center ( to seek legal advice on how best to tackle the situation you are in. The IWRC offers free legal counselling sessions for Indians in distress in the UAE. They run a toll free helpline too (800 46342).

Debt panellist 3: Steve Cronin, founder of

Fourteen months is a long time to sustain yourself without a job. Even if you had a cash buffer, that would likely last you six to 12 months. Withdrawing cash on your credit card to pay rent was a big mistake though. The charges for using your credit card as a debit card to take out cash are severe.

It also suggests you were living beyond your means before you lost your job, if you couldn’t cover your rent from your income. Too many people are living an unsustainable lifestyle in the UAE and then an unexpected change like losing their job triggers major difficulties.

Your bank is not being helpful at all and you should push them harder. Consult a lawyer about your credit insurance, assuming you took the insurance policy out while on the company’s visa. Try to find someone more senior at the bank to talk to, as you should be eligible for debt restructuring. Take advantage of new payment holiday regulations that have come in to support people during the Covid-19 outbreak. You can also approach the court and apply for insolvency proceedings, given you have defaulted on your payments.

Unfortunately, it will now be extremely hard to find work in hospitality, as everyone is in lockdown and all the hotels and restaurants are closed. But don't give up. You will need to get creative about what skills you have that businesses need, even in other industries. Polish your CV, connect to people on LinkedIn and through your community, write articles and get yourself noticed.

There is one area where you have experience and that is not having a job. Now many people are in the same boat and they are looking desperately for guidance. It is tough to lead when you are feeling beaten down by the banks and your industry, but the connections you make now if you hustle hard enough could be transformative. There are likely more opportunities online than offline at the moment.

It is essential that you drastically reduce your expenses at this time. Dh16,000 is close to your previous Dh18,000 salary. If you want to stay in the UAE, you will have to slash your rent and your personal expenses – look at the large items and which small items are adding up. You cannot sustain anything like your previous lifestyle until you get a job.

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