The Debt Panel: 'My bank's refusal to restructure my loan is the missing piece in the puzzle'

The borrower has worked hard to resolve his liabilities, but his main lender will not help

Illustration by Alvaro Sanmarti
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I have been on a quest for some time to get my debts down to the 50 per cent debt burden ratio (DBR). I have still not achieved this as despite most of the banks responding positively, the bank where my salary is deposited is refusing to help. I earn Dh13,300 in the marketing industry and live in Sharjah with my wife and two children.  My liabilities are: (outstanding / monthly payment)

Bank 1:

Loan: Dh55,000 / Dh3,600

Credit card: Dh18,200 (limit is Dh18,000)

Credit cards with other banks converted to loans (outstanding / monthly payment):

Bank 2: Dh29,000 / Dh1,700 (paid 16 out of 36 months)

Bank 3: Dh23,000 / Dh850 (paid 3 out of 36 months)

Bank 4a: Dh19,000 / Dh1,005 (paid 1 out of 24 months)

Bank 4b: Dh5,800 / Dh560 (paid 1 out of 12 months)

All my credit cards were successfully converted into fixed monthly installments but when I tried to get my loan restructured with Bank 1 (where my salary gets credited), they denied my request in November last year due to the fact my loan had already been restructured in 2016. According to the bank’s collections department, once restructured it cannot be restructured again. However, in January they told me I needed to finish 24 months of payments on my already restructured loan before they can restructure again. I finished this in March and submitted the request again but an account manager outright 'rejected' my request (quite rudely as well). I then spoke to someone at the bank's risk management department who said another restructure could indeed be done. In fact, they will be the one to build a case to get it approved but the collections department should initiate the request first. And that is where the bottleneck is coming from. 

Now I'm all out of options as my loan is approximately 28 per cent of my salary. My fear is that I will again fall into the same situation of missing credit card payments as I am still at a 70 per cent DBR. All the work I've done to get my credit cards converted into loans will be undone. I've also sent a complaint to Central Bank about this and have had it rejected twice due to 'lack of clarity'.

Is there any other option I can explore? I just need my loan from bank 1 restructured (and to be able to include my credit card balance from that bank with it) down to Dh2,500 a month and then I will be within the 50 per cent. I fell into debt after losing my job in 2015 when I already had debts that I had accumulated through raising a family. I have already tightened all other expenses I can. My current monthly outgoings, aside from debt payments, are: rent: Dh4,200; utilities: Dh1,200 and loans with family/friends: Dh1,800 (for 8 more months), My wife takes car of the school, car and grocery costs. What do you suggest for my next steps? RE, Dubai

Debt panellist 1: Shaker Zainal, head of retail banking at CBI bank

It is commendable that you have already made some great progress in managing and reducing your debt burden and getting on a path to becoming debt free.

It is not uncommon for requests such as yours to be rejected by a bank's debt management department as they will have specific policies and criteria that must be met before debt restructuring is considered. Also, policies differ from bank to bank, so an agreement you make with one bank will not necessarily be replicated by another.

As an initial step, make an appointment to meet a senior manager in the bank, who is in a position to agree to restructure your loan. Check your bank’s website for names and email addresses of the senior management team and reach out to them if possible.

You should present the bank with a proposal that shows consolidation makes sense. I note that your wife is also contributing to the household, and therefore I presume also earning a salary.  Your proposal should include your total household income and a realistic monthly payment schedule which is agreeable to the bank and both sustainable and achievable to you given your financial position. In general, banks always want to recover outstanding payments amicably and will assist customers with financial problems and help them make repayments.


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

You have come more than halfway, having converted all but one of your credit cards into fixed-term loans. This would have effectively reduced your interest liability, so you're definitely on the right track.

With your primary bank unable to offer you any respite, you could consider opting for a debt consolidation package through other banks, but that also means you'll have to move your salary account to the new lender. There are quite a few banks that offer the debt consolidation facility, and it may be worth your while to survey the banking market to know more about the eligibility criteria and which bank offers the best deal.

However, if debt consolidation does not work out for you, you must  figure out a way to deal with your primary bank. With the collections department of your primary bank rejecting your request to restructure your loan and credit card debt, there is a high chance the debt may be assigned to a third-party debt collection agency if you cannot keep up with regular repayments. This will make it even more difficult for you to discuss a settlement with the bank.

Since you have been trying to negotiate with the bank with no success, it might also be a good idea to enlist the services of a debt management company to negotiate on your behalf. Debt management and counseling companies like Lotus Loans & Overdues Rescheduling Services and Credit Expert based in Dubai, may be able to negotiate better repayment terms for you.

You are also tiptoeing in dangerous territory with your current credit card. Be careful about not exceeding your credit limit, as there will be an over-limit fee chargeable along with the monthly interest. The bank will also levy late payment charges if you skip the minimum monthly payments.

You and your wife are already splitting the burden of major household expenses, so that has obviously helped take some of the pressure off your finances. Together with your wife, find ways to cut back and restrict your budget to the bare minimum. This is also not a bad time to look for opportunities to boost your combined income. Ask for a pay rise or find a new job with better pay, or even take on freelance work to earn supplementary income.


Read more:

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A nine-step guide to help you renegotiate bank debts in the UAE

How an Abu Dhabi resident took three UAE banks to court and cleared Dh700,000 debt


Debt Panellist 3: Rasheda Khatun Khan, a wealth and wellness planner and founder of Design Your Life

There are two parts to your debt issue: the first is the actual consolidation with a bank or banks; and the second is the source of the problem, which lies within the affordability of being able to live how you currently do.  The cycle of consolidation loans will inevitably continue if it is not addressed on both ends. If the monthly repayments of all outstanding loans are not consistently affordable every month over the full term, then you are not any better off with the consolidation loan.  In fact all you have done is delayed your problem and bought time at a high price.

You will also given yourself more time to build up more debt. Eventually banks will no longer be able to help you. This cycle should not be a surprise, which is why it is incredibly important to address your issue as a whole much earlier on. The earlier in the process you address things, the more options you have.

In your current situation, your next option is to approach the other banks. Start with bank 2 as you are further into your loan than the others. Approach debt consolidation brokers and explore that option too. They are able to approach the banks that they have relationships with and sometimes are able to strike an affordable settlement. Make sure you understand their terms of business and be clear on fees.

Next consider how you can reduce your living costs even further. Ask yourself the hard questions like: "can we afford to keep the family here? Is it worth temporarily sending them home?"

Brainstorm ways of increasing your income. Are there any friends and family members you can call upon for help? It is time to use all of your resources and focus on ways to pay debt off, rather than simply manage the monthly installments. You have come so far already, so keep going and focus on a permanent solution not a temporary one.

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