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25 April 2024

Personal finance: Running away from debt in UAE? Here's why you need to stay

By Theda Muller

Your State of Mind

Case Study II – The high-net worth individual

In your mind, what would be the most logical form of action to resolve all debt-crisis?

Being in the UAE I assume your most logical answer would be the below and the reason I stipulated these points is, because you have far more debt to repay and most of everything to lose, if not lost already.

Your business is not generating sufficient income for you to sustain yourself and you are just about scraping the bottom of the barrel, or contemplating closing the company as selling with not a good income record has proven to be difficult. But you need to retain your investor visa for yourself and your family, which is why you are trying to make the company work and be successful again.

You have probably attempted to secure a suitable tenant for your property/s in the hope that it would cover the maximum mortgage payment, but due to the past rental market decline, it was impossible. So now you have 50 per cent of your mortgage payment recouped monthly and you cannot meet the variance.

You have two additional properties, both off-plan and incomplete with the same property developer but you can only afford to maintain the payment on one unit. If you default on the other unit, you shall be issued with a forfeiture notice and possibly lose most of the funds paid to date, which is probably around 30-40 per cent.

You have a credit card maxed out to Dh300,000.00 with a monthly payment of Dh20, 000.00. You also have a guarantee cheque issued for this account for the full credit limit.

You have a car bonded to the bank, already in arrears by two months, your last payment being two months ago

Your action would probably be:

Review the current increased rental rates, secure such rates for your property for the next year, try to secure the full annual rental payment in one go, and prepare to leave the country, because at least you do not leave empty-handed. You will try to salvage whatever you can and leave anyhow. This is the most common reaction from people who find themselves in a debt-crisis where the debt value is huge because as business individuals we have a greater tendency to earn more money most times, so in turn, our standard of living is more or less the same, or higher than our earning power, the latter being the most common.

My response

Why would you want to leave or incur such huge losses, when you have a few good opportunities to recover over a period of time? I can personally vouch that the UAE is the only country in the world where recovery can be a quick process – take it from me, I am speaking from experience and if you don’t believe me, look at your own countries and expose yourself to the stories of recovery where most of the time, people never have the ability to recover because the economy does not afford them the opportunity. Versus here, we are extremely fortunate to be able to ‘pick up the pieces’ and start rebuilding, in the face of what anyone has to say, because I have walked the walk!

Why do you permit yourself to panic at such an alarming rate because fear results in you losing your sole possessions and hard work in an instant?

You have probably not taken the time to evaluate your true financial position, where you would have found that your actual assets, although fixed, exceeds your liabilities, or that you have items to sell and salvage that money to repay some of your debt – how hard can that be? Realistically it is only a sacrifice which we find very difficult, because we attach ourselves to ‘things’ or ‘materialism’ and we can’t let go that easily!

You can approach your bank for a restructured payment plan, with more affordable monthly payments with a fixed interest rate where you will avoid incurring penalties.

You can do the same with your car, if bonded to a bank.

You can approach the property developer for your off-plan property and consolidated both units into one, decreasing your liability substantially with less payments to effect until completion and hence affording you time to be in a position again to secure a mortgage for the balance.

You can be on a 30 per cent paid up status on both units so consolidating into 1 unit meant you were now in a 60-70 per cent paid up status, depending on the retained units size and original purchase price, meant that you only needed to possibly pay the balance on handover affording you the time to prepare for this payment, or sell the unit close to ‘handover’ time.

Finally how can you relocate to another country, even your home country without peace of mind and endure this degree of emotional turmoil, when you could have easily recovered and transformed your life into what it was before.

Lesson to be learnt:

Do as much research or ask for help if you don’t know the regulations, the facts, alternatives or the best Solutions for your immediate problems.

The KEY is ASK and lose your ego or whatever self-importance you have accumulated over a period as it does not serve you now because if you don’t, you will find yourself in the most difficult situation where you have no choice but to be humble and learn the lessons this experience has to teach you.

In life, lessons are there to teach us something and it does not go away until we have learn’t those lessons. You have an opportunity to apply the short-cut and be on your way to recovery!


NEVER sell yourself SHORT. You are worth whatever it is you accumulated, so it is you’re right to retain what is yours and if you lost them, convince yourself by ‘self-talk’ that you will be more successful in the future than you were before.

Running away never solved anything. Learn to face your problems and emerge a transformed creature.

Lose the selfish attitude, think of the people around you and those whom you love and who love you.

Be true to yourself. If you built up so much then you can do it again – Regain your confidence and never give up! There is only one you, so be unique.

Never subject yourself to failure  – it should not exist in your vocabulary.

Facing creditors should be a natural act of recovery. When you reach out it is an attempt to restore and protect.

Shed embarrassment and pride and elevate your humility.

Be aggressive in protecting what is yours.

Be honest with yourself and learn to share.

[Note 1:  Theda Muller is a UAE-based author of two books: Embrace Financial Freedom Volume One: 10 Proven Ways To Release Debt And Emotional Fears In Today’s Economy, and Volume Two: Releasing Fear And Bouncing Back From A Debt Crisis.

She also conducts webinars and workshops on debt recovery.]

[Note 2: The views expressed are the author’s own and do not reflect in any way, the views of
Emirates 24|7. Readers are advised to carry out their own due diligence before taking any decision.]