I am a former resident of Dubai who absconded in March 2016 due to debt. In summer 2013, I was debt-free in the UAE and had savings of approximately Dh100,000. Unfortunately, in August 2013 my wife left me to seek divorce, moving back to the UK with my daughter. I gave her my savings to help them set back up in the UK and, in my depression, I spiralled into debt. When I left in March 2016 I had approximately Dh100,000 worth of debt (one credit card and one personal loan) in the UAE, as well as a sum I owed to my parents. These repayments were not unmanageable on my salary, however, I was informed by my employer that my contract was not going to be renewed and I had an upcoming rental cheque due for Dh75,000 which I did not have. At this point I would have been homeless — I'd lost friends in the divorce so I had nowhere to stay. Additionally, I was mistakenly giving my ex-wife an obscene amount in child maintenance as I had always hoped that by being reasonable we would have a better chance of getting back together. As a result of this, and my own mistakes, I was left in a position of staying in Dubai and potentially facing the consequences of mismanaged debt with a travel ban, potential jail time etc. Having a young daughter in the UK and potentially not having anywhere to live, it was a no-brainer for me to get on the first flight out of Dubai. I stupidly did not inform the bank as I was afraid they would enforce an immediate travel ban. Until recently I have not been able to secure a job, however, I have now obtained another position outside of the UK. The bank I had my credit card with has been in touch via email and I have explained my circumstances to them. There are now significant interest charges added to my debt (more than double the initial amount outstanding). They are insisting on repayment terms which I am unable to service, I have informed them of what I am able to pay as an initial sum and then monthly (it would take me two years), however, they will not negotiate and keep asking for an unmanageable amount for me. They have informed me legal processes are under way and Interpol will be notified. I am deeply concerned as if this is the case I will have no choice but to leave my current employer and return to the UK where I can at least rest safely in the knowledge that I will not go to to jail for this. However, should I have to take this route, I would still be in a position where I would be unable to pay them anything back. What should I do? MH, China
Debt panellist 1: Keren Bobker, an independent adviser with Holborn Assets
MH is aware that he needs to repay what is owed and that he has made some mistakes, so there is no need to chastise him for this. It is normal practice for a bank to add interest and late payment charges to a debt where no payments have been made, so it is to be expected that the amount outstanding would have increased.
I am disappointed however, that the bank in question is refusing to be more amenable when a customer is trying to come to an arrangement to repay what is owed. Surely it is better to have a debt repaid over two years than not at all? If a person simply does not have the funds to pay in full, or over a short period, then they cannot make money out of thin air and in this case MH is clearly wanting to do the right thing.
As for the threats that are allegedly being made, then this is unacceptable and poor practice. I hear of various cases where bank employees have made such threats, but I would consider that to be grounds for a formal complaint as the bank cannot get Interpol involved for a personal debt of this size. This is scare tactics, nothing more.
Interpol, the International Police Organisation, despite media portrayals, is not an international law enforcement agency and it absolutely does not concern itself with low-level personal debt of this nature. It acts as a liaison between countries for the monitoring of criminal activities. While the UAE is a “member” of the organisation it is not for the purpose of seeking out people with personal debts in the UAE.
It would also be hard for a UAE bank to take action against anyone for debt if that person is outside the UAE, particularly outside of the GCC, and I am advised by lawyers that the UK courts will not prosecute for any debts in Dubai. The action that a local bank can take is to register a police case so that MH would be arrested and detained if he returned to the UAE.
I am aware of cases where banks have accepted less that the total amount outstanding and have reduced excess charges for quick repayment and I would urge MH to try and make contact with more senior staff at the bank in question, rather than someone who will not have authority and is also making unsubstantiated threats.
Debt panellist 2: Philip King, head of retail banking at Abu Dhabi Islamic Bank
A sudden change in personal circumstances is the most common reason people get into financial difficulties. Repayments that seemed manageable at one point in time can quickly become a very troublesome burden, and that is why it is always recommended to have some contingency cash on hand – even if you have taken out credit – to get you through a tough period. In your situation, it is important to agree a sensible new repayment schedule with your bank, and to remove the card debt, because this is likely to be the main source of compounded charges, which is causing your debt burden to increase. The first thing to do is to work out how much you can repay each month. Give this information to your bank and ask for a restructuring of your debt. Tell them that you want to address the card debt as the most important step to resolving the issue. At the end of the day, the bank’s main concern should be to resolve this on a permanent basis, rather than to keep you on their books as a delinquent customer.
The Debt Panel brings together four financial experts: Philip King, the head of retail banking in the UAE 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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