The Debt Panel: 'I lost my job and the bank is ignoring my payment holiday requests'

The UAE resident is now on a visit visa and facing legal action because she can't pay her Dh40,000 debt

Mathew Kurian / The National
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I lost my job in April due to the Covid-19 pandemic and my visa was cancelled by my former employer in June. I was unable to find a new job to pay for a visit visa and overstayed the grace period by a few months.

I received a small end-of-service gratuity and used that to sustain myself while I was out of work. I was also able to get a visit visa thanks to a former colleague who helped me to pay for the cost of the visa and the overstay fines.

Apart from the money I now owe my former colleague, I also have two credit cards and a personal loan that I have been unable to pay the minimum amounts because I haven't found a new job.

My debts are:

  • Personal loan: Dh12,056.26 (Dh961 monthly instalment – last payment was May 4)
  • Credit card 1: Dh20,749.24 (last payment of Dh400 was on February 20)
  • Credit card 2: Dh7,541.39 (last payment of Dh500 was on March 6)

I have explained my situation to the bank and have also provided them with a letter confirming my job loss, but they are not helping me.

I do not have any plan to run away and avoid paying my debts as I do not want to lose my opportunity to stay and work in the UAE. I am also answering all of the bank’s calls and emails, and continue to ask them to help me.

My visit visa ends on December 3 and I again face overstaying the grace period.

I am receiving emails from debt collection agents saying they will file a police case against me over my security cheque, and that I face criminal and civil cases in the courts and an immigration ban. I am worried this will prevent me from getting a new job and start repaying my debts. How can I convince the bank to help me? NA, Dubai

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

This is a very challenging period for many UAE residents, and I sympathise with you on the immense pressure you must be facing. You have done the right thing by informing your bank about your job loss and remaining in contact with them throughout the process. Your sense of accountability and commitment to repaying your finances will benefit you greatly when negotiating with your bank.

After three missed loan repayments, and following prior warnings, there is a possibility that your bank may seek legal action. However, we advise you to thoroughly read the terms and conditions of your agreement with the bank, which should state your rights and obligations in this situation.

With that being said, there is a lot being done by the UAE government and Central Bank of the UAE to protect vulnerable individuals given these unprecedented circumstances. Through the Targeted Economic Support Scheme (Tess), banks are supporting customers in overcoming the impact of the Covid-19 pandemic.

Keep in mind that interest will continue to accrue even when repayments are paused or reduced, so the total amount you repay will be more than it would have been with your initial repayment schedule

Given the current challenging situation, some banks are allowing payment deferrals to support customers who are undergoing unexpected job losses due to Covid-19. This is something you can further discuss with your bank.

Secondly, you can consider options to consolidate your current loan and two cards into a new facility with a longer tenure and lower financing rates. This will provide you with breathing space while you continue your job hunt.

It is in the bank's interest to resolve your issue promptly and mitigate any risks of further default, so they are highly likely to co-operate with you on new repayment terms.

Living with debt can be distressing and we highly recommend that you decrease your expenditure as much as possible through stringent budgeting, selling assets to raise funds, or even contacting family at home for financial assistance in this difficult time.

Debt Panellist 2: Stuart Ritchie, chartered financial planner at AES International

I would advise getting in touch with your bank, either by telephone or in person at your branch, to find out what debt relief options are available. The bank may be able to restructure your debts to make your repayments more manageable for you at this current time, such as increasing the term of your loan so your monthly instalments are reduced to what you can realistically afford.

They may also allow you to make interest-only payments until you find another job. The majority of banks in the UAE have been offering a three-month payment holiday for those affected by the pandemic, providing they have made previous repayments and their account is in good standing.

Keep in mind that interest will continue to accrue even when repayments are paused or reduced, so the total amount you repay will be more than it would have been with your initial repayment schedule.

Once you have spoken to your bank, you can then have a conversation with the debt collection agents to inform them about what you have agreed with your bank. Given what you owe, the bank will be looking to protect themselves from losing that money if you were to leave the country.

In the meantime, try to avoid taking on any more debt and do everything you can to find employment again. One suggestion would be to contact your previous employer and ask about returning to your old position now that the Covid-19 situation has started to improve in the UAE.

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

One can only imagine how challenging it must be for you to stay on and sustain yourself in the UAE without an income. On top of that, you have multiple outstanding debts to worry about, without any respite being offered by the lenders.

Since you have already defaulted on your loan and credit card debts, chances are the bank may take legal action to prevent you from leaving the country without repaying your debts. But now that negotiations with the bank are not working out in your favour, you have to find other ways to deal with your debt situation.

One option is to tap into your savings or investments back home, or request your immediate family or close relatives to help you out financially. Even if you can manage to repay only your expensive credit card debts, it will rid you of the heavy interest and penalties that are accruing on your credit card accounts right now.

The next option is to consider filing for insolvency. This is usually recommended as the last resort for anyone struggling with debt repayments. However, it may be the most appropriate route for you considering the circumstances of your employment.

The UAE's Personal Insolvency Law lets you approach the civil court and request a court-mediated settlement of your overdue debts, when you aren't in a financial position to meet your debt obligations yourself.

Such a settlement would cover your loans and credit card debt under one umbrella. You could reach out to your country's embassy/consulate in the UAE to get pro-bono legal advice on how to pursue the insolvency option.

As for finding a job in the UAE, have you had a look at the Ministry of Human Resources and Emiratisation's Virtual Labour Market? Register yourself on this portal to access both permanent and temporary employment opportunities being offered in the UAE.

Along with this, you should keep looking for work, even part-time or freelance opportunities. You could also shift your focus towards sectors that have witnessed heavy demand during the pandemic, such as logistics, e-commerce and home deliveries.

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