I was living and working in Dubai when I lost my job in April last year because of the Covid-19 pandemic. After losing my job, my employer kicked me out of the company accommodation and forced me to return to India.
I filed a case against my employer to pay my end-of-service benefits and other money owed to me but they settled for less and as I was hungry and jobless in Dubai, I decided not to fight this.
Shortly after arriving home, I was diagnosed with Covid-19 and spent the next three months in hospital.
When I was living in the UAE, I had a credit card and owed Dh10,000 on it. I was able to keep up with payments until September by using my savings.
While I was in the hospital, the bank also granted me a three-month payment holiday under the UAE Central Bank’s Targeted Economic Support Scheme as I informed them about my situation before leaving the UAE.
During the payment holiday period, the bank charged me late fees and other charges and the debt has increased to Dh11,900.
I am now receiving emails from a third-party collections agency in the UAE. They are threatening me and demanding the money owed on the credit card. I want to negotiate with the bank and restructure my debt without interference from the agency. I am also worried that if I return to the UAE, I will go to jail.
Can you advise me on what to do in my situation? Is it possible to restructure my debt with the bank even though a collections agency is now involved in the matter? And how can I convince the agency to stop threatening me?
Debt panellist 1: Steve Cronin, founder of DeadSimpleSaving.com
I think there are thousands of people in your situation at the moment. It seems you have been messed up by your employer and your bank. This may not help you, but for others chasing their end-of-service benefits, a lower out-of-court settlement does not necessarily prevent you from claiming the full amount through the courts.
It would depend on the terms of the settlement agreement you signed, if any. For you, however, once your visa is cancelled and you are out of the country, this route is probably not viable.
Your bank should not have charged you late fees during the Tess payment holiday – that is the point of a payment holiday. Have you raised this issue with them? Contact them and push hard on this. At the same time, make it clear that you wish to settle your debt through them rather than the debt collector. Again, you may have less success with this now you are out of the country.
It is a sign of how dangerous credit card debt can be that you carried on making payments all the way through to September, yet the amount owed is now significantly higher than the original Dh10,000.
A debt collector in India would have the potential to cause more problems for you – one in the UAE can only phone you up and hassle you. You do not risk jail as the amount you owe is well below the Dh200,000 limit for criminal debt cases.
However, you may receive a fine from the police upon your return to Dubai and you probably would not be able to secure a new work visa until this is resolved.
Is there any way you can borrow money in India from a bank, family or friends to pay off this debt and move forward? This would stop the debt from ballooning due to interest and late fees.
Is there any work you can do online or remotely from India? I don’t know if your expertise is suited to this, but do use your network from your time in Dubai to look for jobs or part-time work so that you have a plan for when you can move beyond debt and the lockdown.
Debt panellist 2: R Sivaram, executive vice president and head of retail banking products at Emirates NBD
You have faced an unfortunate turn of events over the past nine months. As good practice, one should always try to settle all bank debts, however small, and close all lines of credit before relocating from a country. However, I am glad that you are taking steps to manage the situation and clear your debt even though you are no longer based in the UAE.
The best option would be for you is to contact your bank at the earliest to explain the circumstances that have led to your current situation and request for details of the original principal outstanding, as well as the subsequent interest amount and fees charged on your card.
Once you have received this information, discuss the matter directly with the bank’s team responsible for your case.
Given that the original outstanding amount was low and that you have no other liabilities, the bank may choose to take a lenient view and support you in settling the issue with minimal additional charges and without the need for any legal recourse.
Ask the bank to provide you with a debt restructuring plan that will allow you to pay back the outstanding amount in affordable monthly instalments. Banks will usually accept a reasonable repayment tenor in line with your debt-servicing capability – provided there is willingness and co-operation from your side.
I wish you luck in finding a workable repayment plan with your bank and also in finding suitable employment to help alleviate your financial condition.
Debt Panellist 3: Carol Glynn, founder of Conscious Finance Coaching
I am sorry to hear you have had such a difficult year and have been badly affected by the pandemic.
The first step I would suggest is to approach the bank directly. Have all relevant history of your debt and situation documented in detail, then request a meeting with a senior representative within the bank. As you are in India, this can be done by Zoom or by phone.
The most important information to include is a letter from your former employer proving that your job loss was due to Covid-19.
Also include evidence of the previous agreement from the bank that gave you a three-month payment holiday and the terms and conditions, your past payment record, evidence of your stay in hospital and details of all conversations you have had with the bank.
Ask the bank to explain why you were charged late fees and penalties during the agreed payment holiday. Then request that these charges are reversed and ask the bank to issue a revised statement of outstanding debt to you.
While banks usually give only one payment holiday, they also exercise discretion and, given your current situation, may extend the holiday. Ask them to instruct the agency to cease calling you as you are working on a resolution directly with the bank.
If the bank representatives are not helping to resolve the issue, you can formally raise a complaint. You must first raise this in writing directly with your bank. Check the bank's website for instructions on how to submit your formal complaint.
Again, document and attach all relevant information to this submission, including details of the latest conversations with the bank.
The bank is required to reply to your complaint within 30 calendar days of submission. If it is still not resolved to your satisfaction, you can then raise a complaint and request assistance from the Consumer Protection Department of the UAE Central Bank.
It is important to note the Consumer Protection Department's new rule book, issued in August 2020, which clearly states they will only proceed if the consumer has followed these steps: 1) filed a complaint directly with the bank; 2) the bank has not accepted the complaint or provided a final response within 30 calendar days of receipt of the complaint; or 3) if the consumer is not satisfied with the response.
All of these steps take time, which means that your debt will continue to grow. Credit card debt is extremely expensive, so I would urge you to find ways to pay it while you are working to resolve the issue with the bank. Do you have any assets you can sell and use the proceeds to clear the debt? The more you can pay off now, the less it will cost you in the long term.
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 email@example.com