The Debt Panel: 'My salary cut is making it impossible to repay the Dh95,000 I owe'

The security worker now earns Dh3,500 after he was forced into a lower paid role by redundancy

I owe Dh95,000 on credit cards and a personal loan to different banks. I took on these debts when my salary was Dh6,100 but in January my salary reduced because I lost my job as a security supervisor because the company was reducing staff. I now earn Dh3,500 working as a security staff for another company. This is making it very hard to make my instalments on time.

My debts are:  Outstanding/monthly payment

Bank 1:

Personal Loan: Dh24,156/Dh1,234 (loan started in April 2016)

Bank 2:

Personal Loan: Dh11,000/Dh630 (started in April 2016)

Bank 3:

Credit card: Dh10,000/Dh750 minimum payment

Bank 4:

Credit card: Dh12,500/Dh700 minimum payment

Loan (against a credit card debt): Dh30,000/Dh1,000 (started in January 2018)

Bank 5:

Credit card: Dh7,500/Dh600 minimum payment

Total owed: 95,156

I started borrowing because my younger brother had a major accident in India and I paid for his treatment. This means I now support two families – my family and my younger brother’s family. After that I borrowed more to clear my debits, but now it is getting worse because of my sudden salary reduction. My monthly groceries and daily bills comes to Dh700 with mobile costs on top of Dh250. My employer provides my accommodation.

The amount I need to repay the banks is more than Dh4,900 - way over my salary - and before my wages were reduced I used to send Dh1,000 to my family in India every month. Now all my savings have gone because I cannot meet the debt repayments and the daily struggle is making me feel down. I feel as though I am losing the battle. Please suggest how I can get rid of this problem? SS, Dubai

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

Given your current financial situation and the amount you owe to UAE banks, I’m afraid that you cannot afford to continue to support your brother’s family as well as your own. Your focus should now be entirely on managing your own finances so that you can find a path out of debt.

You currently have three active cards with high charges. If you continue to just make the minimum monthly repayment you will not make any headway into paying these off. With a salary of Dh3,500 and total debts in excess of Dh95,000, you have a steep mountain to climb and with total monthly repayments coming in at Dh4,900, your priority must be to speak to your primary bank requesting that they help you restructure your debt - specifically with a consolidation loan over a long tenure so that you can make simple, low single monthly repayments.

While your total debt is more that 20 times your monthly salary, the bank will have to take exceptional measures. However, it is also in their interest for you to repay what you owe them. Therefore, when approaching your bank you should have a comprehensive plan of incomings and outgoings demonstrating a clear commitment to meet these repayments.


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

Given a pay cut of over 40 per cent, it is no surprise you are struggling to keep up with your financial commitments. We can only imagine how difficult it would be to sustain both your and your brother's family on your significantly reduced income, and that too with a trail of debts to deal with.

But the fact is that you were already headed for trouble when you ran up all that debt on your credit cards. Now, since the combined monthly instalments on your loans and minimum payments on your credit cards far exceed your income, you will have to take a close, hard look at your personal assets to bail yourself out. If you have any savings or investments that you can dispose of, the money can help you pay off a portion of your debt. If you do find anything that can be easily liquidated, make sure to use the proceeds to first pay off and close your credit cards one-by-one. This is your most expensive debt and the longer it remains outstanding, the bigger it will grow and the more difficult it will become to get rid of.

It would also be a good idea to start speaking to your lenders about restructuring the terms of repayment on your loans. Explain the shift in your financial circumstances to the bank, and your intention to repay your debts as soon and as efficiently as you can. Ask if they can offer you an extension in loan tenure, which will help reduce the amount of your instalments and take some of the pressure off your finances. You can also request your credit card providers to convert your credit card debt into a fixed-term loan, which will help lower your interest burden.

Approach your close relatives to see if they can offer you an interest-free loan or at least help bear the household expenses of your family until you sort your debt situation out. Would your wife, as well as your brother's wife be keen to look for employment? Any additional income, no matter how small, can make a huge difference to your family's financial well-being at this point of time.


Read more:

The Debt Panel: Single mother of four is being hounded by debt collectors over Dh43,000

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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 2: Steve Cronin, founder of, which helps residents invest their own money

You are in a difficult situation, having lost your previous job and covering the cost of your brother’s accident. You can be forgiven for feeling that none of this is really your fault, though you must find the strength to push on for the sake of yourself and your family.

Your minimum monthly instalments add up to 40 per cent more than your current salary, which is unsustainable. You need to get a consolidation loan, covering as many of your loans and cards as possible. The limiting factor here is your lower salary – the monthly instalments cannot be more than 50 per cent of your salary.

Here are some concrete actions you can take:

1. Talk to your bank as soon as possible and ask for a consolidation loan. Ask to talk to the supervisor if you are not making progress. Explain your situation in full and show them your salary certificates. If no luck there, then contact the other banks that you owe money to and see if they can give you a better consolidation loan if you move your salary to them.

2. Do everything you can to get a better-paying job with the same company or a different company, work overtime or get a company loan. See if you can earn any additional income from helping people at other times. Sell any assets you may have. Find creative ways to boost your income otherwise you will never escape this debt trap.

3. See if you can reduce your expenses further, such as your mobile costs and groceries.

4.  If you find yourself with additional money once you have paid your minimum instalments, put it towards any remaining credit card balances. Do not spend any more on your credit cards – this is very important. Your credit card balances will grow faster than your loans because the interest rate on cards is much higher.

5. See if you have any family members or charities that can support your two families in India. Are any family members able to get some work to bring in some money?

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