Debtors, first steps when you realise you’re facing a debt-crisis…

Theda Muller

Here I am referring to the way back initial ‘red flag’s that popped up that you ignored for months until it snowballed and spiraled out of control, which is what you are facing now, which could have been prevented.

When you first realise you will not be able to meet your creditor EMI’s (Equated Monthly Installments), this being predominantly for loans, credit cards and other credit facilities, don’t be delusional to assume that some form of miracle will suddenly pop up and resolve your problems in the near future, because it won’t.

If you don’t take action, there will be no change and one day you will find yourself unable to either face your debt problems or handle them.

This situation could result out of:

1. Loss of employment.

2. Loss of a spouse’s employment.

3. Unable to cycle credit card payments, yes!

4. Reduction of either your or your spouse’s salary.

5. Continuing to overspend with plastic, i.e. money you don’t have on items you don’t need, this is very common.

Whatever the reason, take stock, compile an income and expenditure schedule and spend time to ‘look at it’, see for yourself what your real situation is because if you simply opt to ‘twirl it in your mind’, you don’t see the real debt situation. So once you have done that, absorb the facts, take ownership and responsibility and arrange to meet your creditors immediately.

When you meet your creditors take all documented proof of the solution you propose to present which will justify your request, whatever that might be.

The documents would be:

1. Current residence/employment visa.

2. Passport copy not less than 6 months.

3. Emirates ID.

4. 6 months bank statement up to the current date.

5. Salary certificate / pay slip as proof of salary payment.

6. Copy of your income and expenditure schedule.

Any additional documentation will be requested by your creditor.


1. Do not delay this process, gain clarity and set your intention to secure a final solution for this debt-crisis that you may face in the future, or that you are currently facing.

2. Lose your fear as it will not serve you. Concentrate on your main goal and hold that picture in your mind.

3. Don’t allow anyone to discourage you during this process, not for any reason at all.

4. Calculate what you can afford to repay monthly and present that value to your creditors for review and possible approval.

5. Maintain a record of all documentation.

6. Maintain a record of all creditor follow-up dates until your request is approved.

7. Make copies of agreements, documents and guarantee cheques you issue to your creditor/s.

8. Try not to issue blank cheques, insist on the new agreement value and complete the cheque with this data.

9. Once you issue a new guarantee cheque, ask your creditor for the old one and if they cannot return it then ask for an official letter on their letterhead recording that your old cheque is no longer valid for presenting for legal action and that it is replaced by the new guarantee cheque.

10. Maintain a record of all legal documentation, especially new agreements, legal case releases and other key documentation.

11. Maintain this level of organization as you will continue to ‘have your finger on the button’ and be aware of any incident that could adversely affect this process.

Remember, nothing will change if you don’t apply those changes and also change yourself!