I owe Dh110,000 on two credit cards and until recently was paying the minimum amount every month. I was made redundant from the hospitality sector last year when my employer restructured and I have been without a job for 14 months. Before losing my job I was earning Dh18,000.
I have been trying to find a job but it's taking longer than expected. I built up the debt paying for everyday expenses and by withdrawing cash to pay rent.
When I was made redundant, I approached the bank for credit shield insurance and was told the insurance company would pay Dh48,000. However, I was later informed that I need to be on a company visa to take advantage of this. This did not seem logical to me as I had been made redundant so how could the company keep me on their visa?
My debts are:
Credit card 1: Dh80,000 (Dh3,600 minimum payment)
Credit card 2: Dh30,000 (Dh1,800 minimum payment)
Total: Dh110,000 (Dh5,400 in minimum payments)
I later approached my lenders for a settlement plan, asking if I could only pay the principal amount and not the interest. They asked me to pay a higher amount on a monthly basis for one year, which I could not afford.
I have been trying to find a job but it's taking longer than expected. I built up the debt paying for everyday expenses and by withdrawing cash to pay rent. For the last year I have relied on family and friends to survive. I also support family in India. My expenses come to Dh16,000 and include Dh4,000 for rent, Dh1,000 for petrol, Dh5,400 for credit card payments and Dh4,000 for personal expenses.
Now I have defaulted on the payments for the past three months as I have no source of income. The bank now says it will file a legal case against me. I have spent 26 years in UAE and in the past I have always been a bank customer who had no debits et cetera. What should I do? GP, Dubai
Debt panellist 1: Philip King, head of retail banking at Abu Dhabi Islamic Bank
You are taking the right steps by keeping your lenders informed about your situation, as it exhibits you are financially responsible towards meeting your financial obligations.
With the current economic slowdown and job market tensions caused by the global pandemic, the UAE has implemented debt support measures and relief to help the community prioritise meeting their living expenses, as well as immediate financial commitments. With that being said, the Central Bank of the UAE announced its Targeted Economic Support Scheme, which was boosted to Dh256 billion, including deferral of loan principal and interest payments, which allows banks to grant temporary relief for loan payments until the end of the year.
Given these circumstances, banks are being encouraged to co-operate and support their customers. It is advisable to contact your lenders and discuss repayment options or temporary relief that can be offered to you in light of above developments. Explain to them the circumstances of your default and reinstate your commitment to repaying the debt once you secure a job.
Alongside your efforts with your banks, consider decreasing your expenditure as much as possible through stringent budgeting, or liquidating any of your assets, or even contacting family from back home for financial assistance.
Debt panellist 2: Ambareen Musa, founder and chief executive of Souqalmal.com
Surviving in the UAE without any source of income sounds incredibly difficult. And in your case specifically, the cost of living, visa sponsorship and debt commitments have forced you to rely on friends and family to get by. This is not a sustainable plan for the long term.
Let's address your credit shield claim first. Credit shield provides insurance coverage to repay your outstanding credit card balance in case of unforeseen and involuntary unemployment, among other benefits. However, this involuntary loss of employment (ILOE) benefit comes with a long list of terms, conditions, limitations and exclusions. For example, redundancy must not be a result of misconduct, underperformance, exceeding holiday allowance et cetera. You must also be on a full-time permanent employment contract, and should have been employed for at least six months under such a contract.
Ideally, you should check the credit shield terms and conditions under your credit card to understand the exact details of coverage. Ask the bank for a copy of the benefits schedule under the credit shield product you had signed up for. If you still feel you've been unfairly denied the benefits, you can approach a legal expert to take a look at the credit shield contract and lodge a complaint with the central bank.
On the employment front, this is undeniably a difficult time to find a new full-time job. The hospitality sector is among many others to have been financially affected by the coronavirus pandemic. However, you could look for part-time or freelance work to start earning some cash to pay down and settle your credit card debts.
If all else fails, you have the option of declaring bankruptcy under the UAE's new insolvency law. However, the provisions under this law come with their own terms and conditions. For instance, debtors can request a court-approved repayment plan only if they're about to default on their monthly payments or have missed a repayment within the last 40 days. A legal counsellor can help you navigate this. You can approach the Indian consulate and the Indian Workers Resource Center (http://iwrcuae.in) to seek legal advice on how best to tackle the situation you are in. The IWRC offers free legal counselling sessions for Indians in distress in the UAE. They run a toll free helpline too (800 46342).
Debt panellist 3: Steve Cronin, founder of DeadSimpleSaving.com
Fourteen months is a long time to sustain yourself without a job. Even if you had a cash buffer, that would likely last you six to 12 months. Withdrawing cash on your credit card to pay rent was a big mistake though. The charges for using your credit card as a debit card to take out cash are severe.
It also suggests you were living beyond your means before you lost your job, if you couldn’t cover your rent from your income. Too many people are living an unsustainable lifestyle in the UAE and then an unexpected change like losing their job triggers major difficulties.
Your bank is not being helpful at all and you should push them harder. Consult a lawyer about your credit insurance, assuming you took the insurance policy out while on the company’s visa. Try to find someone more senior at the bank to talk to, as you should be eligible for debt restructuring. Take advantage of new payment holiday regulations that have come in to support people during the Covid-19 outbreak. You can also approach the court and apply for insolvency proceedings, given you have defaulted on your payments.
Unfortunately, it will now be extremely hard to find work in hospitality, as everyone is in lockdown and all the hotels and restaurants are closed. But don't give up. You will need to get creative about what skills you have that businesses need, even in other industries. Polish your CV, connect to people on LinkedIn and through your community, write articles and get yourself noticed.
There is one area where you have experience and that is not having a job. Now many people are in the same boat and they are looking desperately for guidance. It is tough to lead when you are feeling beaten down by the banks and your industry, but the connections you make now if you hustle hard enough could be transformative. There are likely more opportunities online than offline at the moment.
It is essential that you drastically reduce your expenses at this time. Dh16,000 is close to your previous Dh18,000 salary. If you want to stay in the UAE, you will have to slash your rent and your personal expenses – look at the large items and which small items are adding up. You cannot sustain anything like your previous lifestyle until you get a job.
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
if you go
The flights
Flydubai offers three daily direct flights to Sarajevo and, from June, a daily flight from Thessaloniki from Dubai. A return flight costs from Dhs1,905 including taxes.
The trip
The Travel Scientists are the organisers of the Balkan Ride and several other rallies around the world. The 2018 running of this particular adventure will take place from August 3-11, once again starting in Sarajevo and ending a week later in Thessaloniki. If you’re driving your own vehicle, then entry start from €880 (Dhs 3,900) per person including all accommodation along the route. Contact the Travel Scientists if you wish to hire one of their vehicles.
The specs
Engine: 1.5-litre 4-cyl turbo
Power: 194hp at 5,600rpm
Torque: 275Nm from 2,000-4,000rpm
Transmission: 6-speed auto
Price: from Dh155,000
On sale: now
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
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Available: Now
Where to buy
Limited-edition art prints of The Sofa Series: Sultani can be acquired from Reem El Mutwalli at www.reemelmutwalli.com
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
UAE currency: the story behind the money in your pockets
The BIO:
He became the first Emirati to climb Mount Everest in 2011, from the south section in Nepal
He ascended Mount Everest the next year from the more treacherous north Tibetan side
By 2015, he had completed the Explorers Grand Slam
Last year, he conquered K2, the world’s second-highest mountain located on the Pakistan-Chinese border
He carries dried camel meat, dried dates and a wheat mixture for the final summit push
His new goal is to climb 14 peaks that are more than 8,000 metres above sea level
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Results
Stage three:
1. Stefan Bissegger (SUI) EF Education-EasyPost, in 9-43
2. Filippo Ganna (ITA) Ineos Grenadiers, at 7s
3. Tom Dumoulin (NED) Jumbo-Visma, at 14s
4. Tadej Pogacar (SLO) UAE-Team Emirates, at 18s
5. Joao Almeida (POR) UAE-Team Emirates, at 22s
6. Mikkel Bjerg (DEN) UAE-Team Emirates, at 24s
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Abaya trends
The utilitarian robe held dear by Arab women is undergoing a change that reveals it as an elegant and graceful garment available in a range of colours and fabrics, while retaining its traditional appeal.
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
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- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
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- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
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MATCH INFO
Fixture: Ukraine v Portugal, Monday, 10.45pm (UAE)
TV: BeIN Sports
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Engine: 3.0-litre six-cylinder turbo
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Fuel economy, combined: 6.5L/100km
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THE BIO
BIO:
Born in RAK on December 9, 1983
Lives in Abu Dhabi with her family
She graduated from Emirates University in 2007 with a BA in architectural engineering
Her motto in life is her grandmother’s saying “That who created you will not have you get lost”
Her ambition is to spread UAE’s culture of love and acceptance through serving coffee, the country’s traditional coffee in particular.
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UAE currency: the story behind the money in your pockets
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Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
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Global state-owned investor ranking by size
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Mohammed bin Zayed Majlis
The biog
Born: Kuwait in 1986
Family: She is the youngest of seven siblings
Time in the UAE: 10 years
Hobbies: audiobooks and fitness: she works out every day, enjoying kickboxing and basketball
UAE currency: the story behind the money in your pockets
Gulf Under 19s final
Dubai College A 50-12 Dubai College B
