Got a Pink Slip in UAE? Here is what to do next!
UAE expatriates who find themselves out of a job, thanks to the financial crisis, have a number of tough choices to make in the initial few days post-redundancy.
Top of the list is sorting out finances, including negotiating with banks over debt repayments and loans. And with residency linked to their employment, this often means using the next 30 days (or possibly longer, depending on the approval of a new proposal to extend visas for recently laid-off expats) to look for a new job or make plans to leave the UAE. We spoke to the experts for a step-by-step guide.
1 HUMAN RESOURCES Your company’s HR department should be a first point of contact if you’ve just been let go. Every firm is different and HR is your best bet for finding out about your company’s compensation package as well as how much time you have before your residency visa expires. Under current laws, jobless expats could have their visas cancelled within a month, but the UAE Government is looking at a proposal to allow those made redundant to remain in the country longer to look for work. Your HR department can also answer any labour law questions you may have and provide a ‘no objection certificate’ that would let you change sponsors once you find a new job.
2 LEGAL OPTIONS A good lawyer will also apprise you of your rights under the UAE Labour Law; and could even recommend visa services firms if you want to use a layoff to start a company or other such options.
Moutasem Shakhatreh, an associate at independent law firm Al Tamimi & Company, says the best solution to tackling finances is to start negotiations with your financial institutions to settle debts, as individuals cannot file for bankruptcy in the Emirates. “Most expats here have loans from banks, for their homes, cars, and so on. If they decide to return to their home countries after losing their jobs, these loans obviously need to be paid back. If the expat doesn’t have the funds to do this, the bank could be uncooperative, file a case against him and start enforcing securities. In this case his assets end up being sold at a public auction,” he says. So it is in the banks’ benefit to negotiate with customers to start rescheduling debts and have the loans repaid, he adds.
3 CONTACT YOUR BANK UAE banks encourage recently laid-off customers to go into a branch or call in to customer service numbers and seek advice on debt servicing. They offer facilities such as restructuring entire loans and increasing the tenure to make it easier for clients to pay down these borrowings.
“The first thing we do is encourage our customers to actually call us and tell us there’s an issue because what happens sometimes is it can fester and come to a point of no return, and then it’s very difficult to help out a customer,” says Niranjan Mendonca, head of retail assets at Mashreq bank. “There’s no way we can help until a customer comes and talks to us – that’s the only way we can offer facilities that will help the customer to settle their debts and liabilities.”
4 GET DEBT SERVICING ADVICE Most banks offer advice on debt servicing facilities to customers with multiple debts to help pinpoint which ones are key – for instance, home mortgages or monthly rent. “We don’t want customers in this position to end up having to move out of their homes so we ask them to pay down debts that will not otherwise affect their lifestyle. It’s a factor of what’s going to cause the customer the most amount of discomfort,” Mendonca says. “It all depends on the customer’s requirements at that point in time. We treat each customer differently depending on their circumstances and devise solutions and strategies accordingly.”
5 PAYING AT A DIFFERENT PACE Many banks in the UAE also offer rescheduling options on any outstanding debts a jobless expat faces. Increasing the period so the customer has longer to pay off the loan often decreases monthly repayment amounts, making it easier for the customer to meet due dates.
Mendonca says the ease of rescheduling a loan depends on the customer. “If the person has a job offer from another organisation it means there’s going to be a source of income 30 days down the line. However, another person who doesn’t have a job would obviously be treated differently. With the first customer, we would only need to manage one month of his payments. For the other, we would need to manage his entire lifestyle, the entire way he is going to repay the loan.” He says there are multiple other factors that come into play, including whether the customer’s residency visa gets terminated immediately or the ex-employer allows an extended residency.
6 MAKING PAYMENTS FROM ABROAD? “Every customer has a fallback mechanism he can turn to – whether he dips into his savings, or approaches family, social network or support functions to help out – so that’s the reason we tell customers to not get over leveraged. Use the cheapest means you can use first before going into expensive modes of repayment,” Mendonca says.
Most banks say the ideal scenario is to settle all outstanding balances in the country if you are planning on leaving. However, if you don’t have the cash flow or support to pay off all your liabilities, remittance facilities are available from some banks to settle monthly payments in the UAE from abroad. Speak to your financial institution to find out what their specific policies are.
7 CAR LOANS AND RESALE Whether you’ve decided to leave Dubai or stay on and look for a job, a vehicle is often a liability expats give up to cut back on outgoings. If leaving the country, it is key to sell the car and settle the loan amount with the bank, says Mendonca. If time is tight, the fastest – though not the most economical – way to sell a car is through a dealership.
Jonathan Greenslade, General Manager of Gargash Motors in Dubai, says, “We have a lot of expats who are leaving the country and who need to be able to sell. They can either go back to the dealer and see if they want to buy the car back, or go to used car dealers. The downside is you might not always get the best price but it is guaranteed because the money will be paid. My advice is to start earlier rather than later because the later you leave it the more panicked you are going to be and the less money you’re going to make.”
However, Greenslade says if a car loan is greater than what the dealer is willing to pay, the customer needs to cover the rest. “We call it ‘upside down’, which means the car is not worth what the customer owes,” he says. If you have the time to post advertisements on Dubizzle or your local Spinneys board and wait for a private buyer, this option will get you more money.
8 CONSULAR SERVICES Foreign embassies are another point of contact for expats in difficulty. They can offer information about transferring funds abroad, provide details of local lawyers, and contact family members or friends on your behalf. Crucially, they can update you on how much tax you may have to pay in your home country on your return, depending on how long you’ve been away and the time of year you go back. But don’t expect your embassy to bail you out. “We cannot give legal advice, stand as guarantors, pay debts or interfere in any possible proceedings, but we can put you in touch with a local lawyer,” British Embassy spokesman Simon Goldsmith says.
AOA and Hi , i am from Lahore Pakistan. I need a job in sales
HSBC doesn’t want it’s customers to repay loans!
When the masses began defaulting on their loans when the real-estate bubble burst, HSBC like many banks and officials decided they’d pretend all was hunky-dory. What? Cars being left at the airport- no no! That is untrue!
Finally, when enough accounts had defaulted they decided to tell their customers – come in talk to us, we’ll work with you. We’ll give you a temporary break for 3-6 months and when you get back on your feet you can begin repaying. Well, I fell for the scam; only to find out they had really fine fine print attached to it- you had to have a minimum salary of 10,000 or 20,000 depending on which employee you spoke to.
Did you not hear the words coming out of my mouth? MADE REDUNDANT. It wasn’t enough that you had been a good customer till then, they just wanted you to be employed- why does my employment determine my eligibility for a re-evaluated payment plan? I’m coming to you- telling you help me out, I don’t want to not pay- but it fell on deaf ears. And so began the downhill trip from not being able to pay the full amount to not being able to pay smaller amounts and eventually circumstances meant being unable to stay in the country.
But this wasn’t before their endless harassing calls- even when a customer agreed to pay they called. It was like there was no interoffice communication, and every representative felt the need to call 4 times during their shift, so you’d end up easily with about 12 calls a day. And when the calls failed, they decided to employ intimidation tactics which they assume will work, because the country does not have a working financial or regulatory system. How much sense does it make when you imprison someone who has a bounced check- if they don’t work, you don’t get money; shouldn’t that be common sense?
Anyhow, so here I was – getting calls from someone who they made sure spoke Arabic, because they thought her name sounds South East Asian – she’ll cave and come running to us and beg for forgiveness. And we’ll be the ruthless creatures we are and run to the courts and file a case.
So the Arabic speaking scarecrow starts to call, he claims he has a brother who is a CID, who will help him prosecute this case quickly. And in between all his threats he finds the time to flirt too, sometimes also plays the good cop routine, and then like every other ignorant fool in UAE inquires about my nationality and age. Well- I guess this time your charms or lack thereof didn’t work. I’m here miles and miles away. Go ahead- file your case. Here is a news flash for you! You can’t file a case on someone who isn’t in the country. What part of that, does your pea-size brain not comprehend?
I didn’t walk away and not try and fulfill my obligations. I sent someone to you to pay the loan on my behalf after I left. In fact, he’s been at your offices everyday of October and now November BEGGING you to take the money. But you insist you don’t want it.
You can either take the settlement amount you’re being offered or you will get ZERO. Do you know what ZERO is? Nothing. Zilch. Squat. Null. Clearly if you were smart you’d accept something over nothing. Or at least I thought. Silly me. I have not known any other bank to reject money or give a customer such a hard time for wanting to pay their debt.
He’s tried to talk to every Tom, Dick and Harry or should I say Taha, Dinesh and Hatem in every department and branch he could think of. He goes to the branch, you tell him to go to Dubai Media City- he goes there, they deny HSBC even has a collections department and you send him back to the branch who then question him about who at DMC told him to come there- it’s ridiculous. He’s repeated his attempts to get you to understand that he too will be leaving the country and then there will be no one to pay off this account. And each and every time he’s approached you, you’ve given him the run around, played mind games or pretended you weren’t available to answer your phone or meet. Every new person he’s spoken to takes the account info and says they will surely get back to him and will sort this out. And then vanishes into thin air. It’s almost like you’ve harassed him for wanting to pay. Yesterday, he sat outside the office of Paddy Padmanabhan (Chief Credit Officer) for 2 ½ hours and you didn’t even have the decency in you to tell him that Paddy dear was too busy spending HSBC’s money on ‘lunches’ and would not return for the rest of the day – why is it that incompetency and inconsideration come so easy to the workforce of this nation?
Suraj, Team Leader and Atif Nazir, Collections Coordinator what a disgrace you guys are! Is this how you collect? Your lack of work ethic is mind boggling. How many times have you been asked for a break down of the account and payments? Do you do anything besides sit in your insignificant cubicles everyday sipping on chai and make false promises to deliver? I wonder how’d they feel if they found out that you ACTALLY told a customer who was willing to settle with you that they should not bother paying it if they were leaving the country and you actually even took it a step further and asked them why they wanted to pay and should ‘just leave it’.
Ahmed Ismail, Regional Collections Manager you are your employer’s worst enemy. Clearly, you’re only working for your own earnings not the bank’s. What are you a Regional Collections Manager for if you can’t even make any decisions? Everyday, you turn us away saying you’re still deciding, never giving us a straight answer if you ever do both to answer. And frankly, with the way you’ve been behaving I think you might just be right- why should I bother paying you when you clearly don’t want the money?
And it seems the stupidity doesn’t end with HSBC in Dubai . When attempts were made to contact the UK Collections office, assuming that perhaps their brains might be a tad bigger than Dubai peas, they too started giving us the run-around. They too decided corporate lunches and not answering phones was a better route to take.
So, you know what? I’ve done all I could to try and pay you. In fact, I’ve gone above and beyond and I’m as frustrated with trying as your collection agents are with their jobs. You win- I won’t pay. This is what you wanted after all. Go ahead, do your victory dance, as you fall into loss after loss.
To the rest of you residents struggling to pay your loans, or thinking about defaulting- go ahead. HSBC doesn’t want your money. Run away- they couldn’t care less. And if you really insist on clearing you’re conscious give the money to the flood victims in Pakistan or the earthquake victims in Indonesia- at least they’ll appreciate it.
I took out the loan to pay for wedding expenses. So I guess, thanks HSBC for the all- expense-paid-one-helluva’-lifetime-experience. It’s way better than the measly coffee mug I got for opening an account with Hate Seeing Bleased Customers.
need for job