Illustration by Alex Belman
Illustration by Alex Belman
Illustration by Alex Belman
Illustration by Alex Belman

The Debt Panel: 'The banks harass me and threaten to bounce cheques but is that still a criminal offence?'


Alice Haine
  • English
  • Arabic

I have so many liabilities and the bank collection departments are always harassing me. They want to file a case against me and tell me they will deposit my security cheques, some of which are in Abu Dhabi. Is it the case that bouncing a cheque is no longer a criminal offence? I work in the oil and gas industry in Dubai, earning Dh15,000 as an expeditor, and have lived in the UAE since 2002. My debt issues started when I started paying for my mother's medical expenses in the Philippines, where she is on weekly dialysis.

In total, I owe:

Outstanding/monthly repayments/months of delayed payment

Credit card:  Dh36,000/Dh2,500/three months

Loan 1: Dh18,000/Dh1,420/three months

Loan 2: Dh8,000/Dh1,000/three months

Loan 3: Dh30,000/Dh1,700/ three months

Loan 4: Dh149,000/Dh7,000/ on time

My monthly expenses are: 

Payments for loan 4: Dh7,000

House Rent: Dh3,500

Food: Dh1,500

Money sent to the Philippines: Dh2,000

Balance: Dh1,000

 What should I do?  

EM, Dubai 

Debt panellist 1: Kunal Malani, head of customer value management at HSBC

I am sorry to hear about your mother's health and hope she is recovering well. While I can appreciate the underlying need to borrow money for your mother's medical expense, you have borrowed far in excess of your ability to repay. It also looks like the banks you borrowed from were not made aware of your previous borrowings, else they may have reconsidered before extending you loans 2, 3 and 4. Your current level of debt outstanding and ongoing repayment obligations, plus expenses against your income are clearly unsustainable.

Readers should note that the UAE now has a credit bureau where banks can access information about your current levels of debt, your monthly instalments and your credit card outstanding. This helps banks and customers manage individual debt obligations better, before opting for any new loans. This also helps people be more aware of their personal liabilities.

EM, you are best off working with these banks on a formal settlement agreement, if they agree to offer you a settlement. At a minimum, you could talk to Bank 4 about increasing your loan so you can consolidate your credit card (which might have a high rate of interest) and your smaller loans into one loan. You might also want to ask them for a longer tenure to reduce your monthly payments. That way, at least Banks 1 and 2 – where you have smaller loans – will stop following up with you.

However, even with doing everything of the above, it may still not be enough. If it is possible you may consider arranging to dispose of any personal assets you might have either here or back home in Philippines to help contribute to repaying your obligations.

With regards to bouncing a cheque – the laws have evolved but it is still very much considered an offence. The Dubai Courts could issue you a fine and could still impose a travel ban on you for unpaid debt. You are best off working with your bank towards an amicable settlement.

_____

Read more:

It is possible to restructure debt directly with UAE banks, a Sharjah resident reveals how

The Debt Panel: 'The banks won't negotiate because my Dh180,000 debt situation is not bad enough'

The Debt Panel: 'I owe Dh82,000 to loan sharks for an apartment I sublet to earn Dh6,000 a month'

_____

Debt panellist 2: Rasheda Khatun Khan, a wealth and wellness planner

The first thing to do is contact all the banks. Explain your situation and see what solutions they have. Perhaps you can request a deferment or restructure. Start with the bank with the Dh149,000 loan attached. As you have kept up all payments you may be able to negotiate a restructure or deferment. This way you can release funds to repay the other loans too.

Another option to explore is a consolidation loan. This is where a bank will transfer the lending onto a manageable monthly installment loan over a number of years. You can make a request at the bank if this is on option for you. Alternatively, explore debt consolidation companies; their primary objective is to negotiate with the banks and act as a go-between to help you source the consolidation loan. If they are able to find you the consolidation loan, they will then charge you a fee depending on the complexity of your case.  Sometimes this avenue is more helpful as they have relationships with banks to be able to get authorisation on a loan that you are not at first attempt.

On the other hand, it can also be useful to approach the banks yourself - but in this instance you need to be equipped with your own numbers, knowing what you can afford to repay on a monthly basis. Make sure you go through your expenses and come up with a realistic figure for your monthly repayments towards repaying debt. That way you know what you can actually afford otherwise you risk ending up in the same situation again.

Bouncing a cheque still has it's consequences. Recently Dubai Courts announced the issue of fines instead of jail terms for bounced cheques from December 2017. This still should be avoided as it will only increase the amount of debt, especially if you do not have the money to pay the fines.

What is most important here is stopping this cycle of borrowing. You must ensure your total monthly expenses are less than your monthly income. Ask other family members if they can cover some of your family medical costs at this time to help you avoid any more repercussions.

______

Read more:

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

The Debt Panel: 'I bailed out my mum when my dad died and now owe over Dh240,000'

The Debt Panel: 'I borrowed Dh50,000 on credit cards to pay family medical expenses and friends' shopping bills'

_____

Debt panellist 3: Michael Routledge, a debt adviser 

The changes in the bounced cheque regulations only relate to Dubai, and although a cheque bounced in Dubai will not longer through a court, you will be fined. Looking at your salary versus you your cost of living I’d want to understand a few more details.

Rent: your rent is currently Dh42,000 per year, which I think could be reduced if you were to consider shared accommodation until your debts are paid off.

Money to send back home: I understood from the breakdown of your costs that you pay for your mother's dialysis, does this cost Dh2,000 per month or can this be reduced?

Balance: as you’ve mentioned food etc. in your cost of living why do you need a ‘balance’. Theoretically you could pay that Dh1,000 off of Loan 2 and clear it in eight months.

As is often my response, you should prepare a detailed, transparent statement of accounts that shows your creditors your salary, cost of living, and a breakdown of your debts. You should also obtain your credit report from the Al Etihad Credit Bureau to support this. Please be aware that your lenders will likely not accept the payments sent back to the Philippines as a genuine cost of living.

I believe with some reasonable cost cutting, and some negotiation with your lenders there is no reason why you cannot service the debt you have accumulated, but be prepared for a lot of hard work, as your lenders will undoubtedly push back at your first attempt.

On this panel this week: Kunal Malani, head of customer value management, UAE and Mena at HSBC Middle East; Rasheda Khatun Khan, a wealth and wellness planner and founder of Design Your Life and Michael Routledge, a UAE-based debt adviser

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 pf@thenational.ae

Dust and sand storms compared

Sand storm

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  • Duration: Short-lived, typically localised
  • Travel distance: Limited 
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Dust storm

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  • Source: Can be carried from distant regions
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Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

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Group A: Palmeiras, Porto, Al Ahly, Inter Miami.

Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.

Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.

Group D: Flamengo, ES Tunis, Chelsea, Leon.

Group E: River Plate, Urawa, Monterrey, Inter Milan.

Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.

Group G: Manchester City, Wydad, Al Ain, Juventus.

Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.

The Disaster Artist

Director: James Franco

Starring: James Franco, Dave Franco, Seth Rogan

Four stars

Ticket prices
  • Golden circle - Dh995
  • Floor Standing - Dh495
  • Lower Bowl Platinum - Dh95
  • Lower Bowl premium - Dh795
  • Lower Bowl Plus - Dh695
  • Lower Bowl Standard- Dh595
  • Upper Bowl Premium - Dh395
  • Upper Bowl standard - Dh295
Essentials

The flights
Whether you trek after mountain gorillas in Rwanda, Uganda or the Congo, the most convenient international airport is in Rwanda’s capital city, Kigali. There are direct flights from Dubai a couple of days a week with RwandAir. Otherwise, an indirect route is available via Nairobi with Kenya Airways. Flydubai flies to Kinshasa in the Democratic Republic of Congo, via Entebbe in Uganda. Expect to pay from US$350 (Dh1,286) return, including taxes.
The tours
Superb ape-watching tours that take in all three gorilla countries mentioned above are run by Natural World Safaris. In September, the company will be operating a unique Ugandan ape safari guided by well-known primatologist Ben Garrod.
In the Democratic Republic of Congo, local operator Kivu Travel can organise pretty much any kind of safari throughout the Virunga National Park and elsewhere in eastern Congo.

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Price, base / as tested Dh99,000 / Dh132,000

Engine 3.6L V6

Transmission: Six-speed automatic

Power 275hp @ 6,000rpm

Torque 350Nm @ 3,700rpm

Fuel economy combined 12.2L / 100km

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Pique 38', Messi 51 (pen), Suarez 82'

Rayo Vallecano 1

De Tomas Gomez 24'

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Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.

Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en

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May 20 2020: PM and Carrie attend 'bring your own booze'
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Date founded: 04 November 2017

Founders: Abdulaziz AlBlooshi and Harsh Hirani

Based: Dubai, UAE

Number of employees: 10

Sector: AI, software

Cashflow: Dh2.5 Million  

Funding stage: Series A

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Racecard
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Result
Qualifier: Islamabad United beat Karachi Kings by eight wickets

Fixtures
Tuesday, Lahore: Eliminator 1 - Peshawar Zalmi v Quetta Gladiators
Wednesday, Lahore: Eliminator 2 – Karachi Kings v Winner of Eliminator 1
Sunday, Karachi: Final – Islamabad United v Winner of Eliminator 2

The specs

AT4 Ultimate, as tested

Engine: 6.2-litre V8

Power: 420hp

Torque: 623Nm

Transmission: 10-speed automatic

Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)

On sale: Now

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Starring: Ramy Youssef, Steve Carell, Jason Schwartzman

Director: Jesse Armstrong

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The specs: Lamborghini Aventador SVJ

Price, base: Dh1,731,672

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Top 10 locations for inquiries from US house hunters, according to Rightmove

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Company%20Profile
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Keane on …

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