The Debt Panel: 'Supporting my family back home has tipped my finances into the red'

A mechanic, from India, owes Dh283,000 after buying land and paying for two weddings and his father's medical expenses

Illustration by Mathew Kurian 

I am 30, from India, and work as a mechanic in Sharjah earning Dh5,400 a month. I owe almost Dh78,000 on a personal loan and four credit cards in the UAE. I ran up these debts between April to November last year by paying for my wedding and my sister’s wedding. I also have a debt in India of more than Dh200,000, which I borrowed to build a house in Kerala. My debts are:

Personal loan: Dh43,000

Credit card 1 Dh15,400 (the credit limit is Dh15,000)

Credit card 2: Dh6,300 (the credit limit is Dh5,200)

Credit card 3: Dh7,000 (the credit limit is Dh5,000)

Credit card 4: Dh5,000 (converted into a credit card loan with monthly instalments of Dh317)

Debt in India: Dh207,162 (monthly payment of Dh1,580)

Total: Dh283,862

The situation really got out of control when my wife came to the UAE a year ago and could not get a job. I also had my father’s medical expenses to pay for as well. This all meant I was unable to pay the minimum dues on my four credit cards and I started to miss payments. The loan repayment is deducted automatically from my account when my salary drops so I still meet that every month.

My wife is still here without a job. She managed to get short-term work as a cashier for a month that paid Dh1,750 but she is now pregnant. Due to late payment fees and over-limit fees, the outstanding balances on the credit cards are rising. I now have debt collectors contacting me every month.

My monthly expenses come to Dh2,320 and include Dh1,500 for rent, Dh300 for groceries, Dh220 for my phone and Wi-Fi and Dh300 for transport. How do I manage all of this? VT, Sharjah

Debt panellist 1: Ambareen Musa, founder and chief executive of

Relying on debt, particularly high-interest credit cards, for every major expense is never a good idea. You end up financially overextending yourself, with no means of paying the liabilities off. Given your monthly expenses and the loan instalment deducted automatically from your account, you're barely left with enough to cover your loan in India.

Given your current financial situation, meeting the new financial obligations that come with being a parent is going to be challenging

Unfortunately, delaying your credit card payments is a big financial mistake. Not only are you being charged penalty interest, but you're also paying late payment and over-limit charges. Before you know it, your credit card debt will significantly exceed your original outstanding balance.

Here are some solutions to consider: have you completed construction of the property in India? Depending on how the rental market is doing back there, you could look into renting it out and covering your home loan instalments. This will free up a major chunk of your income, which should ideally be used to settle the credit card debts.

As for the individual credit cards, you must bring the outstanding balance within the designated credit limit. Once that's done, you can ask the credit card providers to convert your debt into a fixed-tenure loan and stop any further monthly interest payments and late payment charges from piling.

It would also be a good idea to assess whether your health insurance coverage would be adequate to cover your wife's maternity and postnatal healthcare expenses. Given your current financial situation, meeting the new financial obligations that come with being a parent (especially in the UAE) is going to be challenging.

Also, speak to your employer and try to negotiate a salary hike or an interest-free salary advance to get your finances back in shape. Any lump-sum cash benefits should go towards settling and closing your credit card debts for good.

Debt panellist 2: Steve Cronin, founder of

This situation really is out of control and it is going to require some extreme action and tough decisions to fix this. Ever since you paid for the weddings on your cards, you have been one step away from disaster.

Weddings may seem like a necessary expense and a matter of family pride, but a cheaper wedding would certainly have saved you a lot of stress.

The credit cards, already over their limits, will continue to spiral out of control and need to be tackled most urgently. I estimate you could just about pay a minimum payment of 3 per cent per month for these, but late fees and covering previously missed payments will make this challenging. Only making late payments is not good enough either, as the card balances will continue to grow. You have to get on top of your debt.

Communication with the banks is essential here. See if you can get the other cards converted to a loan that has a significantly lower interest rate. Track and plan your cash flow every day: what will come in, go out and what the remaining balance will be. Show the banks that you have a plan and are willing to work hard to fix this.

Can you sell your land or property in India? The loan instalments on your Indian debt, which I imagine also has a high interest rate, are preventing you from dealing with your UAE card debt. Even if you sell the land at a loss, it will free up money to pay off your card debts. Then you can start again, and with no debt and better financial discipline, you will soon be able to afford some land. There is no point in trying to live the dream of building a house if you are a couple of steps from jail.

Your entire family must also co-operate to help you through this.

Communicate to them that it might mean a tough couple of years, but once you are through this, you will all be better off. You cannot do this all by yourself. You may need to send your wife home to reduce living expenses, as saving an extra Dh1,000 per month is going to make a big difference and raising a child will be expensive here. Meanwhile, she should try to find any work she can, even if it is helping friends or earning money online doing administrative tasks. Can the rest of your family, including your sister’s new family, support you or her at all, even if just by looking after your parents to take the pressure off you?

Also try to increase your income and reduce your expenses by moving into cheaper accommodation, cutting your mobile bill with a prepaid phone etc. Are there any better-paid jobs out there or ask your employer if you can do more work.

Once you get through this difficult period in your life, resolve to stay away from debt and credit cards to fund major life events. Build up your savings instead and invest sensibly for a much more secure financial future.

Debt panellist 3: Rasheda Khatun Khan, founder of Design Your Life

Managing out-of-control debt is physically challenging and emotionally draining too. Right now your income is not covering your minimum expenses. You need to cut off as many expenses as possible and ask for help.

Firstly go through all of your expenses and cut where you can. Consider the option of your wife going back home to have the baby. Ask other family members to support your expenses incurred for your father's medical costs and sister's wedding. Perhaps they can take on the monthly commitments for now. Can you generate rental income from your home in Kerala to cover the loan you have there? Consider also selling the property as, right now, you simply can't afford it. Do you have other assets you can sell?

Secondly, discuss affordable repayment options with your banks. Explain your situation and affordability. Thirdly, ask friends and family for financial support. With any funds you get, clear your smallest credit card first and then focus on the next smallest and so on.

What's equally important here is to recognise how you got into so much debt. It all comes down to your budgeting and spending behaviour. Any purchase, even the purchase of a loan, should be based on affordability. Here are three top hacks for managing debt:

1. Spot the signs you are in trouble. Maxing out your first credit card is a major alert. To then sign up for another credit only puts you deeper into debt.

2. Say no to expenses you cannot afford to take on. It has to be that simple, particularly when it comes to family, as ultimately you compromise the life and health of the entire family.

3. Build an emergency fund. The number one reason cause of debt is unexpected costs. Expect them and budget for them.

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