The Debt Panel: 'My brother is stuck in India and can't pay his credit card debt'

My brother was living in the UAE, but has been around India since November and does not have a job. He's hoping to return to the UAE and is definitely actively looking for employment here, but without any luck right now.

He is having a concern with his UAE credit card. He owed Dh15,000 onto it, but this has nowadays grown to Dh22,000 as a result of interest and late cost charges.

The bank’s collection division has been calling him continually and requesting a single-payment settlement of Dh15,000 or to pay Dh2,000 monthly.

Prior to the collection department began calling my buddy, he also received a contact from the bank that wanted to convert the overdue amount right into a 48-month loan. He replied to that email and I have as well tried contacting the lender on his behalf to simply accept the offer, but we've been struggling to reach anybody.

Is there any option to convert the total amount into equated regular instalments so I can at least support him settle your debt? Or would it not be easier to request a repayment holiday under the Targeted Economic Support Scheme (Tess) to provide us some breathing space and additional time sort out this issue? RR, Dubai

Debt Panellist 1: Steve Cronin, founder of DeadSimpleSaving.com

Your brother’s situation shows how credit card debt can grow rapidly if payments are not made. He is lucky you are in Dubai to greatly help him.

First, you and your brother should keep a log of all the information, emails and cell phone calls you possess both had with the bank, including the date of every one. Banks tend to be more responsive by phone than via email, so try to phone them using the figures on their website.

Try to speak to the collections department or the loan section. If this doesn’t do the job, visit a branch or the bank's headquarters and insist on speaking to someone who can level you in the proper direction.

If the bank has previously wanted to convert the amount into a loan, you should push them to honour this. It will require the pressure off your finances until you both have significantly more funds because the interest rate should be a whole lot lower. When you can shell out the mortgage loan off sooner, even so, it might be worthwhile doing this to lessen total interest payments.

Banks have different policies on if they allows card debt to get changed into a loan, particularly if payments have got defaulted after 3 months. Theoretically, you should be able to get yourself a payment getaway of three months if you can demonstrate that your brother has got lost his job. It could help to get power of attorney status, so you can manage the paperwork straight.

You could also make an effort to get a personal mortgage loan for Dh15,000 yourself and use it to pay off your brother’s card credit debt. If other people in your family is able to contribute, then your loan may not even have to come to be that big.

If you cannot get a mortgage loan yourself and the lender continues to be not cooperating after thirty days, then you can certainly contact the buyer Protection Department of the Central Bank of the UAE with your paperwork and log of all dates you messaged the lender without response.

Debt panellist 2: R Sivaram, executive vice president and brain of retail banking items at Emirates NBD

I am glad your brother is being conscientious and is looking to clear his personal debt. As an initial step, I would suggest you continue to try to call the concerned section in the bank through email and mobile and offer them with a copy of your brother’s agreement to the mortgage loan restructure.

Explain his current career situation and make an effort to mutually acknowledge a monthly instalment prepare that is affordable and will be serviced by your brother to clear the outstanding personal credit card debt.

Offered the loan amount is comparatively small, the lender may take a more lenient look at and acknowledge a revised payment plan that could fit your brother’s spending plan.

Alternatively, assuming you will be in the country and employed, you might explore either becoming a guarantor or to dominate the re-structured loan. This might further strengthen your demand and perhaps allow for an extended 48-month repayment tenor, reducing the monthly instalment considerably.

I wish your brother fortune with finding suitable career and obtaining financial stability soon.

Personal debt panellist 3: Carol Glynn, founder of Conscious Financing Coaching

It is very sort of you to want to greatly help your brother and I hope he finds work soon. Has he as well looked for occupation in India? Any income he can earn would help his situation, no matter how small. Showing a willingness to repay by making instalments will help his circumstance with the bank.

Usually, a bank takes a customer to be employed, ideally in the UAE, just before they approve a consolidation loan. This may explain why the lender is no longer offering this program to him.

Options under Tess may also be small. It’s unclear if he misplaced his job specifically because of Covid-19. Even under Tess, banks tend to be willing to provide alternatives if the client is employed.

Your brother should continue steadily to communicate and negotiate with the collections group and keep detailed logs of most communications including situations, dates, names and agreements made. This is consequently he can demonstrate a willingness to discover a solution if the problem escalates.

His best choices are to either repay Dh2,000 monthly or discover a way to pay the lump sum of Dh15,000 as this is his cheapest alternative and means he only pays what he originally owed, without the fines and interest.

Have you got stable employment? If you trust your brother will honour your debt, an choice is for you to get yourself a loan to shell out it on his behalf. He can then repay the mortgage loan amount to you.

However, I would caution against taking out a loan for someone else. It's important that you are incredibly careful and also have clear communication together with your brother to document the repayment conditions, amount he will pay each month and total credited before agreeing to take out the loan.

It is a very kind action, nonetheless it can bring about long-term relationship concerns if he's unable or perhaps unwilling to settle you. How do you want to feel if he doesn't repay you? How would that impact your own finances and your relationship not merely together with your brother but also your wider family? Money, especially credit debt, is always a difficult and emotive issue in any relationship.