I am 40, from India, and have lived in the UAE for 16 years but never had the sense to save, as life was always lived very happily. But today I owe Dh600,000 in loans, credit cards and outstanding bills and I want to take my own life. I have endured a horrible life for the past year and am fighting every step of the way because of the debts. I don't see any hope of living. I work as a baker and earn Dh26,000 a month, but the debts have built up from a failed business and being out of work for six months last year. It's mainly my lies that put me in the situation; I have been lying to everyone about the situation, including my loved ones and the people I owe money to. Basically, I set up a pastry shop in my fiancée's name last May, investing a lot of my own money, but the business was not doing well and we were just paying out on bills. During this time I lost my government job and because the business was not doing well I tried to commit suicide, but someone saved me and gave me a second chance. My fiancée and I have broken up but she is staying with me to help me through this situation even though I have run up debts in her name. I eventually got the job I have now, but the debts are unmanageable. I owe about Dh400,000 on four loans with four different banks and I have four credit cards. I have defaulted on payments because of losing my job. Today I'm in a situation – I have to pay the rent for the shop of Dh40,000 to the landlord by 1pm and my housing rent of Dh20,000. Can someone help people like me who get into debt and then start telling lies every time to cover the other lies? I was getting help from friends, but their money comes and then it's used for clearing other friends. I cannot even take care of my parents as I don't have any money to send them. I beg you to help me save my life. MF, Dubai
Debt panellist 1: Alice Haine, personal finance editor at The National
When this emailed letter first came in, we intervened straightaway as the writer threatened to commit suicide that day. We urged him to contact us and after speaking to him on the phone, advised a more structured approach towards his issues. While getting yourself into chronic debt is a very stressful problem – one that can be emotionally debilitating leaving you feeling absolutely desperate – I believe there is always a way out. What was fundamentally important here was that MF had a job and earned a good salary, so with a structured approach resolving his debts is possible. To help MF turn his life around, we offered the following advice, providing him with contacts he could speak to that day to help address the issues. The advice was as follows:
• Tell the truth
The first step was for him to be honest with his former fiancée about the severity of the situation. Protecting her from the truth and also not being honest with his lenders was holding MF back from finding a solution. He needed Dh60,000 that day to pay two landlords, one for his shop and one for his home. This was not possible, but asking for more time and a payment plan over a few months would give him a chance to tackle his debts as a whole.
• Resolve your debts
MF was defaulting on his loan and credit card payments. Therefore, to resolve his cash flow situation and keep his repayments on track, we encouraged him to contact two companies that help extreme debtors resolve their issues. They negotiate with the banks on a debtor’s behalf and help arrange more affordable repayment options. The two companies are:
- Lotus Loans and Rescheduling Services, which works with SMEs and individuals to consolidate their debts.
- Credit Expert, which helps find the best options for consolidation.
Remember, if you choose to use a rescheduling service, check the fees before you sign up to make sure you are not taking on any unwanted financial commitments.
• Get legal help
MF was concerned, as one landlord was threatening to open a legal case against his former fiancée – in whose name the debts were against. A threat to sue is just a threat, but MF still needs to be prepared. For this he needs legal advice, and while this may sound costly, there are some legal companies that will offer counsel on a pro bono basis. DIFC Courts, for example, offers a weekly pro bono clinic. There are sessions every week, usually from 9am to midday at building No 5, office 301 of the Dubai International Financial Centre. It operates on a first-come, first-served basis. For more information, call 04 427 3333.
Debt panellist 2: Rasheda Khatun Khan, a wealth and wellness coach
The emotional distress that being in debt causes is not to be taken lightly. Not only do you have to find a solution to repay the debt, you have to also find a solution to repair your soul.
Remember at the end of the day it’s only money. Yes indeed, you have to find a strategy to have the debt repaid. You need to do your homework and take the actions necessary. But matters of the soul still remain in your control. You have the power to let it destroy your soul or not. Taking your own life is not the solution. Apart from the most important factor that your life is far too precious to waste, your debt will simply be inherited by your loved ones. For many, this presents an even worse situation.
Repairing your soul takes time too, and it all starts with looking forward and making peace with the past. Since we cannot change the past, we must learn from it. Know what you would do differently, what you would advise others, including your children and know how you can use the experience to better shape your future by being able to make better decisions. Then start forgiving yourself.
Get the support of your loved ones. This will not only help you not feel alone but will remind you what’s actually important in life. The poorest people on the planet wake up rich every day.
Re-evaluate your income and expenses. Downsize, downgrade and cut back. Knowing your numbers will give you the confidence you need to have the right conversations and with the right banks, institutions and/or people. Bring your focus to what you can do not what you can’t. Measure and celebrate your small successes along the way. This will help you to build momentum in clearing your debt and keep you feeling like you’re progressing because you are.
Best of luck. And remember, wealth starts from inside.
The Debt Panel brings together four financial experts: Jamal Alvi, the chief credit officer at Abu Dhabi Islamic Bank; 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 pf@thenational.ae.
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