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Debts, loans among concerns of OFWs trying to avail of amnesty program

A number of overseas Filipino workers (OFWs) in the UAE are now trying to settle their debts and existing court cases to be able to avail of the amnesty program which will end on December 1.

Barney Almazar, head of legal aid at the Philippine embassy in Abu Dhabi, said that many OFWs have approached the embassy seeking for help for different finance-related cases, reported The National.

Some of the problems faced by OFWs are debts due to loans from banks coupled with interest rates. Others, meanwhile, have unpaid rents due to bouncing cheques.

Almazar said that social workers in the embassy are trying their best to come to an agreement with banks in lowering the interests of loans and are also trying to negotiate with landlords regarding unpaid rents.

Meanwhile, another problem lies in the retrieval of OFWs’ passports from loan sharks.

Almazar said that some of the OFWs who sought help from the embassy in retrieving their passports from loan sharks only acted as guarantors and not actual debtors.

In cases where debtors had to leave the country, they ask their relative or friends to serve as a guarantor who will swap their passport with the loan shark for the time being.

The amnesty program does not cover expats who have financial cases or other pending legal cases. This is why many OFWs are trying their best to settle their cases now before the program ends.

Photo credit: Lifehacker’s Two Cents

For OFWs in debt, here’s what to do

Overseas Filipino workers (OFWs) in the UAE work hard to earn money for their families in the Philippines. However, not everyone ends up with success. For some, instead of saving money, they find themselves with a huge pile of debt, brought about by senseless spending.

The Filipino Times came across a letter of an OFW in Dubai who is looking for ways to pay her personal loans and credit card bills after the economic crises led her to receive a lower salary which left her unable to support her monthly financial obligations.

TFT got to speak with Dhiraj Bhatia, CEO of Express Debt Management Consultancy to give advice to OFWs experiencing the same problems.

Here are some pieces of advice Bhatia shared:
– Before obtaining any loans, one must understand their total liabilities and how much they have to pay on monthly basis. Before borrowing from a bank/financial institution, the pros and cons must be strictly evaluated.
– Make sure your total monthly loan and or credit card payments should not exceed more than 50 percent of your net salary per month.
– A good practice would be to stay away from credit cards as their interest charges are way higher than personal loans.
– Pay on time in order to avoid any late fees and extra charges to the account.
– Always pay off existing debts first before borrowing again.
– If you have 2 or more unpaid credit cards and loans, seek professional help and avail of debt consolidation program or a debt restructure program. Under a Debt Consolidation program, all existing liabilities are eliminated and converted into one single payment. On the other hand, a
Debt Restructure program is where the existing liabilities are restructured by a financial expert who would also negotiate with creditors on behalf of debtors.

Dhiraj has one last advice to the public to help them avoid facing credit card and loan debts – take action before it’s too late.

“As soon as you feel something is not right, stop making individual efforts and seek an expert advice. A strategy has to be developed which leads them toward a debt-free life. It does not happen overnight but the sooner you start the faster you see results,” said Dhiraj.

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