Questions related to money matters answered by an expert.
I have three credit cards and took a loan on one of the cards to complete the construction of my house in my home country. I would like to close two of my cards after paying off the pending amount of Dh375,000 but I am unable to manage payments with mounting interest. I earn Dh15,000/month. Can I file for bankruptcy under UAE law or should I renegotiate my loan with the bank?
Typically, credit card loans carry a higher rate of interest compared to conventional borrowings, and interest is charged monthly which results in higher repayments. As would have been the case, you are under extreme stress considering that you have excessively leveraged your salary, to the extent of 25 times your salary, using a credit card. Even during these times, we assume that you are settling part of the overdue amount at periodic intervals.
This is the most precarious situation and requires immediate attention. The provisions of UAE Insolvency Law may provide you with some relief. You need to approach a lawyer in UAE to file an insolvency application with the court listing out your debts against credit cards (including interest and late payment charges due), their maturity dates also highlighting the amount under default (due and overdue, but not paid), assets held locally and overseas, your requirements for day-to-day living expenses and repayment plan to settle the outstanding dues. The court may decide to accept your application and accordingly nominate an expert to pursue these proceedings further.
Needless to state that you will have to pay the court fees and expenses to be incurred in the settlement of these proceedings. For future reference, you may wish to opt for credit shield insurance being offered by the Credit Card issuer, which may offer some relief and protection in case of any eventualities.
India’s population is turning out to be the largest market, considering the potential for captive consumption. With political stability and growth reforms, India is one of the leading emerging markets. Excitingly, the world is now eyeing to invest in India and Indian markets. Given this enormous opportunity, Investors are eager to create and grow wealth by participating in India’s growth story.
Quite a few US Dollar denominated mutual funds are available for investment and you may wish to set up a trading account with any of the leading banks / financial institutions and eventually choose to invest in US Dollar denominated Indian mutual funds, that are being offered for investment based on your investment horizon.
You may wish to opt for a systematic investment plan and invest monthly, building up your investment position gradually, with adequate analysis of the inherent market risks and volatility that you may come across when investing funds in equity markets. At this stage, you may only invest part of the proceeds available for investment, with the aim to diversify your investment portfolio.
Dhaval Jasani is a Chartered Accountant and the founder and CEO of ZTI. Views expressed are his own.
News Source: Khaleej Times
