I owe money in the UAE. Can I take a job abroad?

▶ Our ex­perts ad­vise an air­line chef how to work out re­pay­ment de­tails with his bank be­fore he re­lo­cates

The National - News - - FRONT PAGE - 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

Ihave lived in the UAE for al­most four years and re­cently re­ceived a bet­ter of­fer to work in Saudi Ara­bia. How­ever, I still have Dh147,000 left to pay off on two loans – com­mit­ments I do not want to run away from. I can eas­ily pay the in­stal­ments ev­ery month, even if I am not in the UAE, but how do I make this hap­pen? I earn Dh14,000 as an in-flight chef and the new job will pay me Dh16,000.

My debts are:

Bank loan 1: Dh28,000 left to pay (monthly pay­ments of Dh3,632 un­til May 2019)

Bank loan 2: Dh120,000 left to pay (monthly pay­ments of Dh3,852 un­til Oc­to­ber 2021)

To­tal owed: Dh148,000.

I bor­rowed the money to buy a house in my home coun­try, In­dia. I now need proper guid­ance on how to leave the UAE with the debts still in place as I have ev­ery in­ten­tion of re­pay­ing on time.

SH, Abu Dhabi

Debt Pan­el­list 1: Philip King, head of re­tail bank­ing at Abu Dhabi Is­lamic Bank

To main­tain a strong re­la­tion­ship with your bank you should be hon­est and trans­par­ent about your sit­u­a­tion, ex­plain­ing that you are mov­ing to Saudi Ara­bia, where you will be in full-time em­ploy­ment, and have ev­ery in­ten­tion of ful­fill­ing your re­pay­ment sched­ule. You should also share your new em­ploy­ment de­tails and con­tract with the bank to sup­port your ap­pli­ca­tion. How­ever, in many cases, banks will be cau­tious given that you may ab­scond and it would be dif­fi­cult and ex­pen­sive for them to re­cover the debt. You should there­fore be pre­pared that they may not agree to your re­quest.

It is there­fore best to try and re­pay the Dh147,000 in full be­fore you leave. Your end of ser­vice gra­tu­ity should def­i­nitely go to­wards this, as should any funds that you can raise by sell­ing the house that you pur­chased in your home coun­try, along with other as­sets such as a car, fur­ni­ture or any other house­hold items.

In sum­mary, while it is worth hav­ing an ini­tial con­ver­sa­tion with your bank in which you clearly state your in­ten­tion, you should be pre­pared that your ap­pli­ca­tion will be re­jected.

Debt pan­el­list 2:

Keren Bobker, an in­de­pen­dent fi­nan­cial ad­viser with Hol­born As­sets

Con­grat­u­la­tions on the new job. I am pleased you fully in­tend to meet your com­mit­ments. Com­pared to many cases we see, the to­tal amount out­stand­ing is not very large and the re­pay­ments should eas­ily be man­age­able on your in­come.

While banks pre­fer that cus­tomers re­pay loans in full be­fore leav­ing the UAE, not least be­cause it is harder and more ex­pen­sive to chase up de­fault­ers out­side the county, it is not essen­tial.

If ei­ther of these loans are with the bank your cur­rent salary is paid to, they will re­ceive no­ti­fi­ca­tion you have left your job and your ac­count will be frozen. Your fi­nal payment from your em­ployer, plus any End of Ser­vice Gra­tu­ity, will then be off­set against monies owed leav­ing you with a re­duced debt.

Check the terms of any agree­ment paid from a salary ac­count as it may con­tain a clause that states the debt must be paid in full if a monthly salary will cease to be paid.

Given the amount you owe, it is un­likely the banks will ap­ply to the courts for a travel ban, how­ever it may be in your in­ter­est to ne­go­ti­ate with the banks once you have left the UAE. Un­for­tu­nately, many peo­ple leave the UAE with no in­ten­tion of re­pay­ing what they owe so banks are un­der­stand­ably con­cerned in sit­u­a­tions such as this. Pay­ments can eas­ily be made from out­side the UAE and you will need to make ar­range­ments with the bank to do this.

The quicker you deal with this the bet­ter, to en­sure no pay­ments are missed and the banks re­main favourable to­wards you. If ei­ther of these banks has branches in Saudi Ara­bia, you could ask them trans­fer the debts to a branch there. I am aware of cases where a bank has al­lowed this – a bet­ter ar­range­ment for all par­ties.

Debt pan­el­list 3: Am­ba­reen Musa, founder and chief ex­ec­u­tive of Souqal­mal.com

Your pri­mary bank may freeze the funds in your ac­count when the fi­nal salary is cred­ited. This is done to en­sure your on­go­ing debt com­mit­ments are cov­ered in case you were to leave the coun­try with­out re­pay­ing what you owe. The bank can also ap­ply for a travel ban on bor­row­ers if it sus­pects they are likely to ab­scond leav­ing a sub­stan­tial debt trail be­hind.

Given this sce­nario, it is best to keep your lenders in the loop about your plans to re­lo­cate. You can sub­mit the job of­fer let­ter from the new em­ployer as a sign that you are com­mit­ted and fi­nan­cially able to keep up with your reg­u­lar re­pay­ments from out­side the UAE. How­ever, banks may not al­ways be will­ing to ac­cept this ar­range­ment, which is why you must be pre­pared to deal with a de­mand for im­me­di­ate set­tle­ment.

Here’s an ap­proach to con­sider: tap into your sav­ings and in­vest­ments and pos­si­bly ap­proach close rel­a­tives to lend you money to set­tle both your loans. You could also use your gra­tu­ity to par­tially set­tle your loans, or at least the smaller loan. If you can­not gather enough funds this way, you could ap­ply for a home eq­uity re­lease loan (a loan against prop­erty) in In­dia us­ing your home as col­lat­eral.

Once the loans have been re­paid and you have started work­ing in Saudi Ara­bia, you can ap­ply for a per­sonal loan and re­pay your fam­ily mem­bers as well as re­plen­ish your sav­ings/in­vest­ments to get your fi­nances back on track.

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