Monday, 29 August 2011

The Real Prison Break

Debts, loans and credit cards have become a way of life for most people, not only in the UAE, but also around the world.

This is the not-so-sophisticated reality of this sophisticated, modern world of materialism:

Keeping up with the Joneses...
People living beyond their means...
Splurging on things they can hardly afford.
The end - bankruptcy and financial doom.

I am not condemning them.

I made a mistake too.

But my mistake was trusting people - being naive and gullible. Unfortunately, I didn't use a single dime from all the debts that I accumulated on shopping. I simply "lost" it all in a financial transaction gone bad that hooked me with a single signature.

Whatever... The main point is, being stuck with a credit card/loan problem is not easy.

It is a disaster.

It is hell.

If you are reading this and you are in UAE, you probably have a bank problem spinning out of control too (pardon my assumption, most people I know here do.)

It takes a lot of sacrifice and discipline to overcome it.


Therefore, it is POSSIBLE.

If I did it, you probably could too.

Just to share an old article written 2 years back regarding my financial struggle:

How to survive debt in the UAE
 July 26, 2009 By Debt Prison 56 Comments

A Debt Prison reader contacted me two months ago in regards to the desperate financial crisis she was facing in the UAE with outstanding debt. She began calling her creditors daily to convince them that negotiation was in their best interest as well as hers. With persistence and daily phone calls she convinced the creditors that they must agree to a workable payment plan. For Iara, the key to success against the UAE collectors was to keep the lines of communication open and contact them daily until a favorable solution is gained. The same can often be said about collectors here in the U.S.. See also, article ‘Will debt follow you abroad.’
**Disclaimer – does not administer legal or financial advice. The contents of this website are my opinions on collection agencies and how to deal with them. Nothing on this website should be interpreted as legal advice or council. No opinions on this website should be used to replace the advice of your financial advisor or your legal council.

Without the valuable real-life experiences of my readers this blog would not serve as a reliable source of information for debtors. My thanks to each and every one who has taken the time to share their experiences with collection agencies! Here’s the comment Iara posted about winning against her debtors in the UAE.

Dear Debt Prison,

You asked me to come back to you, so I came back to tell you what happened to me after that disastrous affairs with credit cards in UAE. I mentioned to you how helpless I felt, and I wanted to run for my life and go back to Philippines, my home country. Well, the end was quite the opposite.

“FIGHT OR FLIGHT” - I’ve chosen to fight. I am not a criminal to run away.

I started my personal struggle by reading your articles, and they really inspired me. They taught me the things I needed to know: the lies & intimidation of the collections department and how to deal with it. It hasn’t been an easy journey. I decided to tackle one credit card first because it was smaller & easier to kill (only AED 6600). I spent almost two months calling them every single day. I’ve gotten to know all the people working in Collections Department, from several agents to the team leader and then finally, the senior manager.
I was turned down numerous times and was referred to various people. They kept on telling me that someone would call me back, but nobody ever did. But I never gave up, I called the Customer Service and I asked for their help. I told them how unhelpful the agents of Collection Department were and if they could just give me the manager’s name and number. Surprisingly, I got the information, and I talked to the manager and recounted to him that I was willing to pay but nobody was helping me. I told him that I was planning to leave the country for good, and if nobody would arrange my account, I would just leave without paying it. After 30 minutes somebody called me back, he told me to pay the AED 1640.00 and for the succeeding 5 months, I would just pay AED 1000, INTEREST FROZEN (CREDIT CARD SETTLEMENT).

The agent from the other credit card started calling me. But I followed your advice: I didn’t talk to him. He would just make me depressed, and there was nothing I could do, having no money to pay the AED 10000 minimum the bank wanted. So I just dropped AED 200 or AED 500 monthly to that bank, and I was continuously charged the OVER LIMIT FEE & LATE PAYMENT FEE & ALL THE INTEREST (which was shockingly more than AED 1500 per month)!!!!!!!!!!!!!
Weeks crept on. Then few days ago, I received an email from the other bank offering me an Easy Payment Plan that had no other fees but only the 1% per month (so that’s only 12% per annum), and payable for 36 months . . . I was really happy when I received it. Imagine, I am charged more than AED 1000 per month for the penalties and interest alone, but with this plan, I am actually paying only AED 538 interest per month with my outstanding divided to 36 months.
I signed the offer, and now I cannot imagine the relief I feel for having a debt-free life. ALMOST.
I hope that my story will serve as an inspiration to those desperate souls out there.
6 months ago, I thought about ending my life because of debt.
Now, I am sooo good. I lost a lot of money, but I earned an experience and I learned a lesson.


iara (iara was my pseudonym back then)

Sadly, I lost my job 8 months after signing the deal with the bank. I was out of work for 2 or 3 months and I was not able to keep up with the payment plan.

Consequently, all the monies I already paid for 8 months had become "null and void".
Crazy I know, but it seemed to me that the banks just swallowed down the money without giving me credit. 

Moving forward, after 3 months of non-payment, the total balance rose again with a meteoric speed. It ballooned to almost double the original amount.

After finding a new job, I contacted the bank again.

This time, I didn't ask for a payment plan - I wanted to go for a KILL.

I paid them a lump sum and I started paying 70% of my salary to them for 7 months.

I lived below my means for half a year.
I didn't borrow a single dime.
I lived a spartan kind of life.

I was frustrated.
I was determined.

I was furious at my defeat: I just wanted to be DEBT-FREE.

But I know myself, if I aim at something, I will surely get it.

So, early this year, I was able to pay off all my credit card debts! Thank God! :)
It hasn't been easy. But I will reiterate, it is NOT impossible.

Life is too short to worry on useless things such as debts.
This is one thing everybody should get rid of.
Being debt-free is just like being "alive" again.

"If you are going through hell, don't just stay there - keep going!"