In recognition that things can go badly awry, the UAE government has written off Dh361 million for more than 3,000 Emirati debtors.
The Debt Settlement Fund was launched six years ago by UAE President Sheikh Khalifa to help those struggling to pay off loans or credit cards.
The fund co-operates with banks to write off half of the outstanding amount while the other half is paid off by the government, then claimed back from the debtor via the bank.
To ensure debtors are held accountable for their actions, they cannot borrow from UAE banks until they pay off their debt. The numbers speak for themselves as within three years of its launch, 3,482 Emiratis had been helped to the tune of Dh1.5 billion.
As readers of The National's Debt Panel know, it is all too easy to fall into a spiral of debt. The reasons for borrowing more than you can afford to pay back vary from person to person.
Take Sumera Hasan's heartbreaking struggle as a single mother-of-four, whose Dh30,000 loan to pay for the safe delivery of her twins tripled in five years. Or Hassan Al Nuwais, who started accumulating debt when he was only 18 years old and ended up owing millions.
Borrowers often get caught in a cycle of loans, taking increasing amounts and seeing interest rates soar. The bailout for these 3,000 Emiratis will come as a welcome reprieve and cannot be taken for granted.
It is vital that the help comes hand-in-hand with financial literacy lessons so debtors can break this vicious cycle and learn the lesson of need over want.
Financial literacy is all the more essential as 70 per cent of young Emiratis are in debt due to a lack of planning, according to the 2011 report Nielsen Next: Understanding Youth in the UAE.
A 2013 study by the Emirates Foundation for Youth Development found more than half of young Emiratis were influenced in their spending habits by friends.
This might have one positive outcome if former debtors pass on the lessons they learn. There are discussions underway about making financial literacy lessons compulsory for children as young as seven. That can only be beneficial as habits instilled at a young age will have a lifelong impact.