The Debt Panel: 'Can I use my Ajman property to pay off a Dh171,000 debt?'

The former UAE resident returned to the UK after losing his job, but has been furloughed and can't afford the repayments on his credit cards

Steven Castelluccia / The National
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After losing my job in the UAE 18 months ago, I had no choice but to return to the UK to find work. Since arriving home, I have been trying to earn and save as much money as possible to clear the outstanding debts I left behind in the UAE.

With the current Covid-19 situation, I have been on furlough for more than nine months and we are surviving on payments from the UK’s universal tax credit programme.

In total, I have Dh171,000 in credit card debt in the UAE – I owe Dh61,000 on one card and Dh110,000 on the other. I have been unable to make repayments on the cards for about two years now, but am being harassed by the banks to pay ridiculous monthly instalment amounts that I cannot afford.

In 2003, my father purchased an off-plan apartment in Ajman for Dh359,975 and the completion date was expected in 2007. However, construction stalled on the development and we received an update saying that it would now be handed over in April 2022.

Unfortunately, my father’s health has deteriorated and he has transferred the property to my name as a payment to me from his last will and testament. So far, my father has paid a total of Dh151,300 towards the property.

Is it possible to use this property to pay off my credit card debts? In the UK, there is an option that allows you to apply assets to pay off debts and I wondered if the UAE offers something similar. If it does, what would be the process? AC, UK

Debt panellist 1: Steve Cronin, founder of

I’m sorry to hear about your challenging situation – there are many people out there facing similar problems. This shows the dangers of credit card debt and I would emphasise to anyone reading this the importance of paying off your credit card balance in full every month. If you can’t do that and still have a job, focus on paying off your card debt as fast as possible.

Your card debt has been compounded by the risk of buying off-plan properties, which means you have been impacted by both the 2008 financial crisis and the current Covid-19 crisis. Buying an apartment that hasn’t yet been built potentially increases your profits in the short term, but hugely increases your risk.

The property may indeed help to reduce your card debt, although you may not get as much as Dh151,300 out of it. Contact the property company and see if they have a buy-back or secondary market scheme, or at least if they will support you in the sale of the apartment to another buyer.

Alternatively, you could try to sell it yourself to another person or a company that specialises in purchasing such apartments. You may have to sell your stake at a significant discount though, as there is still risk that the property will never be completed and there are plenty of competing properties out there on the market.

This is a large amount to have outstanding on a credit card and with interest rates alone, often almost 40 per cent per year, the debt is growing substantially

You can approach the banks – call them and ask to speak to the credit department, ideally someone relatively senior. There is a small chance they are willing to accept the property as payment for part of the debt, but it would not be for the full value of your stake and I consider this scenario unlikely.

Alternatively, they or another bank may be willing to grant you a mortgage on the property, potentially as a way to consolidate your card debt, secured on the property. Typically, this requires a 50 per cent loan-to-value ratio for off-plan properties and the banks can be picky about which projects they accept.

You will need to check with the property company what the current value of the apartment is, then talk to the bank. Try both the debt recovery department dealing with your card debt and the loan department that deals with customers wanting new loans, as either one might be more interested in pushing this complex loan through the approval process than the other.

At the end of the day, you are in the UK, protected by UK debt laws while you stay there. Talk to the Citizens Advice Bureau in the UK to understand your rights. Make it clear to the banks that you want to settle but they are going to have to be creative and constructive if they want to get their money back faster.

Debt panellist 2: R Sivaram, executive vice president and head of retail banking products at Emirates NBD

It is unfortunate you have suffered financial misfortunes, but I’m glad you are being conscientious about your debt obligations. In your current situation, liquidating assets towards settling your debts would be a good move.

As a first step, I would recommend you reach out to the property developer to obtain clarity on the handover of the apartment and the selling process in terms of the required documentation needed, including the necessary authorisations, such as a power of attorney.

Next, I would suggest you connect with brokers familiar with the area to get a sense of the property value and the time that would be required to sell it to obtain good value.

It would then be advisable to connect with the banks and explain your current situation. You can also share details of the property and your intention to sell it to clear your debt. Given that you are consciously working to settle your debts, the banks should be favourably inclined to work out a suitable repayment plan.

Once the matter has been settled, make sure to request a clearance letter from the bank to confirm all your debts are settled and that you have no other obligations.

Debt panellist 3: Carol Glynn, founder of Conscious Finance Coaching

This is a difficult and no doubt stressful situation to be in, but well done for not ignoring the problem and trying to find a resolution. This is a large amount to have outstanding on a credit card and with interest rates alone, often almost 40 per cent per year, the debt is growing substantially.

You will also incur penalties and fines if you are not paying the minimum balances due each month. If not already done, I would recommend requesting the latest balances from the banks so you have full clarity of the total amount owed.

It is unclear as to the status of the apartment. I have not seen a bank in the UAE apply assets such as this against consumer debt. However, that does not mean it is not possible. I would suggest discussing this directly with the most senior person you can gain access to at your bank.

As the apartment purchase is not complete and the full purchase price is not yet paid, you are also liable for the remaining balance due on the property.

Have you considered selling the Ajman apartment? It is possible that you could sell it back to the developer or to a third party. This would be the best way to release the funds to put towards your credit card debt and solve the problem of being unable to pay the remaining dues on the apartment.

Is it possible to get a consolidation loan in the UK? Interest rates would be significantly lower than the cost of interest plus fines and penalties you are currently incurring on your UAE credit card debt. It would also be less stressful than trying to arrange payments to an overseas bank while you are based in the UK.

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