The Debt Panel: Blacklisted UAE resident finds new job but banks chase Dh100,000 owed

UAE resident, who ran up credit card debts after losing his job, now earns Dh18,500 but cannot secure a consolidation loan as he is now blacklisted following defaults.

Clockwise from top left: Ambareen Musa, founder and CEO of Souqalmal.com, The National columnist Keren Bobker, Rasheda Khatun from Financial Life Planner, and Jamel Alvi, chief credit officer of Abu DShow more

I have some credit cards that I was unable to repay for several months as I lost my job in 2015. During that time, the interest increased day by day and now the four cards have reached double the amount. Then three months ago, I got a job in the UAE once again. But now these banks are threatening me and my HR via email and phone saying, "this person must pay off the money otherwise they will end up in jail". I am ready to pay them, but my job has only just started, so I can only pay slowly. All the banks have listed my name with the Credit Bureau so I cannot get any loan to consolidate them all into one EMI. I am in a critical position and just need Dh100,000 to close all the cards. I earn Dh18,500 a month and can pay back Dh10,000 to Dh12,000 in instalments per month. But I cannot get any loan from any bank as I have been blacklisted. How can I solve this situation to protect/secure my job as well. NS, ​​UAE

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

Congratulations on finding a new job and moving back to the UAE. As a borrower, you have an obligation to pay back any money borrowed, and I am glad to hear that you plan to make your payments and settle your debt. When credit card payments are ignored, your outstanding balance will continue to increase because of interest and fees. Which is why you have accumulated a considerable amount of debt in the past year. To avoid any legal action or jail time, you need to settle your debt.

Start with contacting each bank to negotiate new payment terms. Try to work out a deal by explaining to them your situation and how you plan to make the payments but are unable to clear the entire amount all at once. Hopefully they will arrange for new terms and you can start to make payments again. Ideally, attempt to clear the debt of the credit card which has the highest interest rate first and then continue to pay the rest of them until you’re debt free.

Another possibility is to explore all your financial options. Do you have any assets which you can sell to settle your bills, such as property back home, a car or even jewellery? Are there any friends or family you can borrow money from? Extra cash from them could help you pay off a considerable amount. Also, since your HR is already aware of the situation, would they be able to help you with perhaps a salary advance? To settle your bills, you will have to make sure to reduce your spending and cut corners wherever possible. Consider making extra income by freelancing but make sure you aren’t in violation of your current employment contract. Keep in mind that once you have cleared all your debt, you will need to get a clearance letters from the banks.

Debt panellist 2: Jamal Alvi, chief credit officer at Abu Dhabi Islamic Bank

The best option is to approach the bank where the salary is getting transferred (referred to as the main bank). Your main bank should be able to offer a debt consolidation despite your bad credit history with other banks.

The Debt Panel brings together four financial experts: Jamal Alvi, the chief credit officer at Abu Dhabi Islamic Bank (ADIB); Ambareen Musa, the founder and chief executive of the comparison website Souqalmal.com; Rasheda Khatun Khan, a wealth and wellness planner and founder of Design Your Life; and Keren Bobker, The National's On Your Side columnist and an independent financial adviser with Holborn Assets in Dubai. Together they answer queries in a weekly online column to help readers better tackle their debts. If you have a question for the panel, write to [e-mail].

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