I am an American teacher who worked for the Abu Dhabi Education Council in 2013 to 2014. I received two credit cards from an Abu Dhabi bank. I spent about Dh24,000 on my credit cards and went home to the US for the summer. Then while I was away, my mother was in an accident and I had to support her and take care of her, which made it impossible for me to return. In the US I could not find work and was unemployed for more than six months. During that time the interest and fees on my credit cards accrued to a grand total of Dh84,625. That amount is substantially larger than what I spent and impossible for me to pay. I would like to make a settlement offer and make payments immediately. I would like to return to teaching in the UAE this August because I have a job opportunity. How can I get clearance to re-enter the country, make a settlement offer and make payments to the bank. What is the best way to go about doing this? P A, US
Debt panellist 1: Keren Bobker, The National's On Your Side columnist and an independent financial adviser with Holborn Assets
I assume that P A did not contact the bank after leaving the UAE to notify them of his problems making repayments? If he did not, the bank will assume the worst, believing there is no intention to repay the monies borrowed and will apply all penalties and late interest charges in accordance with the terms and conditions of the credit cards.
My suggestion is that P A contacts the bank immediately to explain the situation and to advise it of his intention to repay the monies outstanding. He must make it clear the oversight in contacting them was because of family circumstances and that he would like to arrange full settlement. If P A has the funds to repay the debt in one go, the bank is likely to be amenable to reducing the amount required by waiving some of the fees and charges accrued, although there are no guarantees. It is however, in the bank's interest to get an outstanding debt off their books and remember that being pleasant can also help.
If, for any reason, he does not get a response from the bank on emailing them, he should let me know as I have contacts at this particular bank and can ask them to consider the repayment offer.
P A also needs to ensure there is not an outstanding police case for debt in his name, as this could mean being detained on entering the UAE. P A can ask the bank if they have registered a case but can also ask a friend in Abu Dhabi to go to a main police station, with a copy of his passport, to see if any cases are listed. No personal information will be disclosed but the police will be able to confirm whether or not there is a case. If there is, P A needs to ensure the bank withdraws this. Again, he should get someone to check with the police that it has been cleared before re-entering the UAE to ensure there are no problems. He should also get written confirmation from the bank confirming that all outstanding debts have been repaid and bring that to the UAE with him.
Debt panellist 2: Jamal Alvi, the chief credit officer at Abu Dhabi Islamic Bank
Credit cards are a payment product and should only be used as a credit facility in extreme cases of emergency – and that too only in the short run. Because you did not pay your credit card spend on time, the interest and finance charges have mounted as the interest rate on cards is high as compared with traditional loan products.
Your best option is to get in touch with the credit card issuers and start negotiating a settlement. You should offer to settle the full amount of your spend and partial part of the interest and late payment charges. Banks usually offer a discount if you offer to pay in one go.
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 [email protected].
