The Debt Panel: 'We are struggling to juggle our debts on a reduced salary. Should we apply for help under the Tess programme?'

The Ajman resident is the sole breadwinner in her family and is finding it difficult to meet rising expenses and loan repayments

Steven Castelluccia / The National
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I earn a monthly salary of Dh11,000, but my employer has cut it by 30 per cent to cope with the fallout of the Covid-19 pandemic. My husband also lost his job last year and we have two children to support.

We have a personal loan of Dh150,000, which I am currently repaying. I am struggling to make ends meet as my salary has to also pay for the rent, our children's education, groceries, medical expenses and other costs.

I also faced a health scare recently. I cannot afford to be rendered incapacitated as I am the sole breadwinner in the family. I have had to ask friends for financial support during these difficult circumstances.

We have a property that is rented out in our home country, but the money from this goes towards supporting my family back home. We are also using a credit card to tide us over when times become financially difficult.

Would we qualify for assistance under the Central Bank of the UAE's Targeted Economic Support Scheme (Tess)? If so, would it be worth it or would our debt problems worsen? Can you advise us on what to do? AB, Ajman

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

Unfortunately, the repercussions of the global pandemic continue to be felt by many individuals and families. Unexpected job losses and salary cuts have increased the physical, mental and financial pressure on many people across the UAE.

However, since its introduction last year, Tess has sought to protect vulnerable individuals during these unprecedented times. In addition, many banks have implemented separate measures to support customers who are struggling due to changes in their income.

Firstly, it is highly recommended that you discuss your situation with the bank and emphasise the financial pressure you are facing. This reassures your bank that you are taking your financial responsibilities seriously and that you are committed to not missing any of your payments.

The Tess scheme may help you in the short term, but does not resolve the underlying issue you currently have of spending more than you're making

Under the Tess programme, you can request that your bank defers a payment or provides a payment holiday. To support your appeal, it would be helpful to provide documentation from your employer stating that you faced a salary reduction due to circumstances related to Covid-19. In addition, your husband can provide similar documentation that illustrates his job was also lost as a result of the pandemic.

While credit cards are typically beneficial for short-term spending needs or emergencies, it is important to remember that they can be detrimental when used as a long-term financing tool. Therefore, when engaging with your bank, it would be better to discuss the option of restructuring your loan to one with a longer tenure and lower monthly payments, as well as the outstanding balance on your card to provide you with breathing space.

During this challenging time, we highly recommend that you decrease your spending as much as possible through tight budgeting. We also encourage your husband to continue his job hunt and even consider taking on freelance or part-time work to help relieve some financial pressure.

Debt panellist 2: Stuart Ritchie, director of wealth advice at AES

Rather than taking on more debt in the form of personal loans and credit cards, if possible I would recommend using the income from your rental property to make up the current shortfall.

This would allow you to get on top of your debts, at least until your salary returns to the pre-Covid level and your husband finds employment again.

The Tess scheme may help you in the short term, but does not resolve the underlying issue you currently have of spending more than you’re making.

You may feel that pausing your repayments in the short term will allow you the breathing space to organise your finances.

However, I suggest that you prioritise finding a way to increase your income, either through the additional rental income or through your joint earnings. Without doing so, you will only be delaying taking on additional debt in the future.

Debt panellist 3: Ambareen Musa, founder and chief executive of

A drastic fall in your household income is a legitimate cause for worry. And having a loan to manage apart from the costly living expenses is no doubt going to be difficult.

Let's talk about what financial relief options are available to you first. Tess was launched by the UAE Central Bank last year to support struggling borrowers like yourself. Since you haven't availed any financial relief from your bank yet, you should check with them to see if you qualify for a payment holiday.

You could also seek a restructuring of your current loan terms to make repayments more affordable for you. This solution could involve expanding your loan tenure and/or reducing the interest rate to make your monthly instalments smaller.

Ultimately, debt repayment relief may be subject to a number of qualifying criteria and up to the bank's discretion. Approach your bank armed with proof of your salary reduction and use your unblemished repayment track record as a negotiating tool.

In terms of your income, have you or your husband considered taking on part-time or freelance work to help your family tide over these challenging next few months?

Alternatively, do you have the financial means, such as savings or investments, back home that could be tapped into to meet your income shortfall? As tough as it may sound, it is also important not to empty all your savings right away. Your best bet is to convince the bank to offer you some form of financial respite as you try to unlock another income source.

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