As part of ‘The Debt Panel’, The National published an article about an Abu Dhabi bank employee and his wife who have taken on a combined debt of over AED 350,000, and are struggling to make regular repayments now…
I am sinking under my debts and need help to restructure, consolidate and settle my dues as soon as possible. I’ve been driven into this situation as I depend on credit cards to pay my rent of Dh44,000 on a villa in Abu Dhabi because my salary has not been rising. I pay the landlord in three cheques, and in addition I take care of my parents in India. I have loans as well and my wife is in the same situation. We took out the loans to settle some issues in India and because we defaulted on a card payment once, the credit card debt just started mounting. I signed up for my first credit card with an Dh8,500 limit in 2014. This was to sponsor my family. Then during every rent payment I’d take out new cards. When I started being refused new credit cards, I made my wife sign up for cards too – so now her income is also swallowed up by payments. While I work for a bank earning Dh9,372 a month, my wife works for as an English teacher in a school, earning Dh6,500. In total we owe Dh226,000 on three loans with monthly repayments totalling Dh5,800. We also owe Dh127,100 on seven credit cards. We have nothing left and we owe two instalments of school fees for our 10-year-old daughter. Please rescue us from the claws of debts by giving us some advice on proper financial planning.
Here is what Ambareen Musa, one of the debt panelists and Founder & CEO of Souqalmal.com, had to say.
With a combined monthly salary of just under Dh16,000, and total debt of over Dh350,000, debt consolidation looks difficult, as your liabilities are 22 times your salaries. You have already missed your minimum credit card payment, and the interest and fees would have started piling. Before you know it, you’ll hear from debt collection agencies. You could possibly explore the debt restructuring route, but that will involve speaking to all banks individually, explaining your situation to them and requesting a new payment plan with a longer tenure/lower interest. Since you work for a bank, this would be a good place to start.
It’s also time that you take the steps you should have taken a few years back: conscious and strict budgeting, which is indispensable if you want to make a difference in your financial situation…
For full article go to The National.
