Self Help Guide for Debt Relief Plan /

Transcription

1 Self Help Guide for Debt Relief Plan / 0

2 Introduction As part of AKPK s efforts to encourage borrowers to be in full control of their own financial situations, this Self Help Guide (SHG) aims to facilitate borrowers in communicating or negotiating directly with their lenders on debt repayment proposals. SHG is a step-by-step guide that provides the following documents to support borrowers repayment proposals: Appendix 1 Getting started with Debt Repayment Proposals Appendix 2 Form A: Monthly Budget Appendix 3 Form B: Debt Repayment Proposal: Multiple Lenders Appendix 4 Formula for Pro-rata Payment Appendix 5 Sample of Debt Repayment Proposal Letters: (a) Single Lender (b) Multiple Lenders (c) Full & Final Settlement Appendix 6 Lenders Contact Numbers Appendix 7 Debt Relief Plan Flow-chart Borrowers are advised to use SHG as a guide for their debt repayment proposals and to approach their lenders first before seeking assistance from any other parties. As a borrower, please ensure that you: receive a written reply from the lender concerned on the repayment proposal keep all correspondences, payment records and other documents related to the loan(s). Debt Relief Plan A debt relief plan is normally initiated by the borrower and evaluated by his/her lender. If you have difficulty in paying the monthly loan instalments, you may negotiate directly with your lender to restructure/reschedule the loan(s). For this purpose, you may submit for the lender s consideration a debt repayment proposal with instalments that suit your current repayment capacity. Upon evaluating your debt repayment proposal, the lender may accept or reject the proposal, or negotiate with you for more payment. Lenders may not immediately accept or reject your proposals. Nevertheless, lenders appreciate your sincerity to repay the debts and would be willing to work out a debt relief plan. Be ready to change your lifestyle as this debt relief plan requires determination, dedication and selfempowerment. Please refer to Appendix 1 as a guide for preparing your debt repayment proposal. 1

3 Appendix 1 Getting Started with Debt Repayment Proposals Applicable: Y Not applicable: N Steps Single Lender Applicability Multiple Lenders Full & Final Settlement 1. Prepare a monthly budget using Form A (Appendix 2). Take into account expenses you pay on a quarterly, semi-annually or annual basis. Be realistic with your monthly expenditures so that you have as much surplus income as possible to repay your debts. 2. Prepare a Debt Repayment Proposal: Multiple Lenders using Form B (Appendix 3). Calculate pro-rata payment to each lender based on the formula in Appendix Prepare your debt repayment proposal letters: Appendix 5(a): Single lender Appendix 5(b): Multiple lenders Appendix 5(c): Full & final settlement Y Y Y N Y Y (If > one lender) Y Y Y 4. Forward your proposal letter to your lender together with your: Income Statement EPF Statement Income Tax Statement Form A Payment cheque (if possible). Y Y Y Form B N Y Y 5. Follow-up with your lender(s) after giving them some time to review and evaluate your proposal. Further negotiations with the lender(s) may be necessary. See Appendix 6 for Lenders Contact Numbers. (If > one lender) Y Y Y Note: Sample templates and steps only act as a guide. Make necessary adjustments to reflect your own debt situation. The Debt Relief flow-chart is provided in Appendix 7. 2

4 Appendix 2 Name : Form A: Monthly Budget NRIC : No. of dependents : Income Self (RM) Spouse (RM) Combined (Self + Spouse) (RM) Salary after statutory deductions (i.e. tax, EPF and SOCSO) Allowance / Commission Other Income Total Income (A) Expenses Rental Other non-bank borrowings Groceries Clothing Medical /insurance Child care Utilities Transport Others Total expenses (B) Surplus income before loan repayment (A) (B) Note: If no surplus income after deducting your monthly expenses, consider increasing your income or trimming your expenses before proceeding further. 3

5 Appendix 3 Form B: Debt Repayment Proposal Multiple Lenders Pro-rata Payment Proposal NAME : NRIC : LIST OF LENDERS No. Name of Lender Type of facility A/c No. 1 Outstanding debts (RM) Pro Rata Payment Proposal (RM) Total 4

6 Appendix 4 Note: Apply this formula to prepare Form B Formula for Pro-rata Payment Pro-rata payment ensures that each of your lender gets a fair share of the total repayment proposal. For example, if you owe a total of RM40,000 from 4 lenders : Bank A RM15,000 Bank B RM10,000 Bank C RM 8,000 Bank D RM 7,000 RM40,000 Based on your monthly surplus income, you can pay a sum of RM500 each month (for example). Step 1: Step 2: Step 3: Write down the breakdown of amount owing to each bank under Outstanding Debts column. Workout the calculation (amount owing to each bank total debt amount x proposed monthly instalment). Sum up the total amount of payment to each lender in the Proposed Monthly Payment column and the figure will come to RM which is the monthly amount proposed. Lender Outstanding Debts (RM) Pro-Rata Calculation Proposed Monthly Payment (RM) Bank A 15,000 15,000 / 40,000 x Bank B 10,000 10,000 / 40,000 x Bank C 8,000 8,000 / 40,000 x Bank D 7,000 7,000 / 40,000 x Total 40,

7 Appendix 5 (a) Sample Letter Single Lender Your name and address Date Lender s name and address Dear Sir/Madam, Proposal for Revised Debt Repayment Type of Facility:. Account Number: I write to seek your kind consideration and approval on my proposal to revise my monthly debt repayment. 2. For the past few months/years, my circumstances have changed and I am currently experiencing financial difficulties because of ( explain the problem in a few words). For this reason, I am currently unable to make the usual monthly payments. 3. Based on AKPK s Self Help Guide, I have prepared my monthly income and expenditure statement as attached. As you may notice, the statement clearly shows that I am having difficulty to meet all my monthly commitments. 4. Despite not being in a position to repay my debt based on the usual monthly payments, I am proposing for a lower monthly instalment of RMxxxx of which the payments will be made regularly each month on/by date. I would also appreciate if your institution could kindly consider reducing or stopping any further interest/other charges to the account. 5. I do hope that this is a fair offer considering my circumstances and that your institution will accept the monthly payment offered. I would be grateful if you could confirm your acceptance in writing at the earliest opportunity. I will then make the revised monthly payments in return. Thank you for your kind attention on this matter. Yours sincerely, 6

8 Appendix 5 (b) Sample Letter Multiple Lenders Your name and address Date Lender s name and address Dear Sir/Madam, Proposal for Revised Debt Repayment Type of Facility: Account Number: I write to seek your kind consideration and approval on my proposal to revise my monthly debt repayment. 2. For the past few months/years, my circumstances have changed and I am currently experiencing financial difficulties because of ( explain the problem in a few words). For this reason, I am currently unable to make the usual monthly payments to all my lenders. 3. Based on AKPK s Self Help Guide, I have prepared my monthly income and expenditure statement as attached. As you may notice, the statement clearly shows that I do not have sufficient funds to repay all my lenders after meeting all my monthly expenses. 4. Despite not being in a position to repay all my lenders based on the usual monthly payments, I am proposing for a lower monthly installment of RMxxxx (on a pro-rata basis as per enclosed list of lenders) of which the payments will be made regularly each month on/by date. I would also appreciate it very much if your institution could kindly consider reducing or stopping any further interest/other charges to the account. 5. I do hope that this is a fair offer considering my circumstances and that your institution will accept the monthly payment offered. I would be grateful if you could confirm your acceptance in writing at the earliest opportunity. I will then make the revised monthly payments in return. Thank you for your kind attention on this matter. Yours sincerely, 7

9 Appendix 5 (c) Sample Letter Full and Final Settlement Your name and address Date Lender s name and address Dear Sir/Madam, Proposal for Full and Final Repayment Type of Facility: Account Number: I write to seek your kind consideration and approval on my proposal to make full and final repayment of my outstanding debt. 2. For the past few months/years, my circumstances have changed and I am currently experiencing financial difficulties because of ( explain the problem in a few words). For this reason, I have defaulted on several monthly payments. Based on AKPK s Self Help Guide, I have prepared my monthly income and expenditure statement as attached. As you may notice, the statement clearly shows that I am having difficulty to meet all my monthly commitments. 3. Despite not being able to repay my debts in full, I have been able to raise funds from my relatives and friends for settlement of my debts. I am therefore able to offer your institution RMxxxx in full and final settlement of the above account. This offer is made on the understanding that upon acceptance, your institution will consider the debt settled. As such, your institution will release me from any future liability and will be responsible to notify the related credit reference agencies that this account has been satisfied in full. 4. I do hope that this is a fair offer considering my circumstances and that your institution will accept the full and final settlement offered. I would be grateful if you could confirm your acceptance in writing at the earliest opportunity. I will then make the settlement payment in return. Thank you for your kind attention on this matter. Yours sincerely, 8

10 Appendix 6 Lenders Contact Numbers (As at 31 May 2013: Numbers may change from time to time) 1. Affin Bank Bhd : Alliance Bank Malaysia Bhd : AmBank (M) Bhd : Bangkok Bank Bhd : * 5. Bank of America Malaysia Bhd : * 6. Bank of China (M) Bhd : * 7. Bank of Tokyo-Mitsubishi UFJ (M) Bhd : * 8. CIMB Bank Bhd : Citibank Bhd : Deutsche Bank (Malaysia) Bhd : * 11. EON Bank Bhd : Hong Leong Bank Bhd : HSBC Bank (M) Berhad : JP Morgan Chase Bank Bhd : * 15. Malayan Banking Berhad : OCBC Bank (M) Berhad : Public Bank Bhd : RHB Bank Bhd : Standard Chartered Bank Malaysia Bhd : The Bank of Nova Scotia Bhd : * 21. The Royal Bank of Scotland Bhd : * 22. United Overseas Bank (Malaysia) Bhd : Sumitomo Mitsui Banking Corporation (M) Bhd : * 24. Bank Pertanian Malaysia Berhad (Agrobank) : AEON Credit Service (M) Bhd : Al Rajhi Banking & Investment Corporation (M) Bhd : Bank Islam Malaysia Berhad : Bank Muamalat Malaysia Berhad : Bank Kerjasama Rakyat Malaysia Berhad : MBF Cards (M) Sdn Bhd : Diners Club (M) Sdn Bhd : Kuwait Finance House (M) Bhd : Asian Finance Bank Berhad : * 34. Bank Simpanan Nasional : *General Line 9

11 Steps for Debt Relief Plan 1. SIT DOWN AND ANALYSE YOUR OWN FINANCIAL SITUATION Appendix 7 2. LIST DOWN TOTAL OUTSTANDING DEBTS 3. WORKOUT YOUR MONTHLY INCOME AND EXPENDITURE BUDGET 4. WRITE A PROPOSAL LETTER TO YOUR LENDER NEGOTIATION 5. REPLY LETTER FROM YOUR LENDER ACCEPT REJECT 6. PROCEED WITH NEW AGREEMENT & PAYMENT 7. SEEK AKPK s ASSISTANCE ( / 10