Mr. Yap lost his brother when he collapsed one ill-fated Monday morning due to sudden heart failure. Burdened with the heavy loss the family just incurred, Mr. Yap ascertained that his untimely luck didn’t just end there. As Mr. Yap was a guarantor to a housing loan sign-on by his brother, he was liable for paying the monthly installments of RM 1,800 towards financing the home. Unfortunately Mr. Yap was in no financial position to carry such a sizeable amount of repayments and decided that the burden was much too heavy to handle.  After all he had his own family to care for and his own debts to think about. Almost immediately the property was auctioned off by the bank, forcing Mr. Yap to incur a new debt of RM 120,000 the shortfall arriving from the sale.

Mr. Yap inopportune situation did not just end there. Due to the stress of foreclosure on his brother’s home and the sizeable debt he incurred as a guarantor to his brothers estate, he started examining his own financial situation and discovered that unknowingly he was succumbing to a life of high debts and borrowings. His credit cards debts escalated to about RM 16,000, while his personal loans peaked at RM 18,000. Aside from that, Mr. Yap also had a housing loan of RM 200,000. All this debt with only a monthly income of RM3, 000 proved to be too immense to handle. Mr. Yap was fighting hard to stay afloat and was threatened with bankruptcy by creditors. My Yap was fearful that if he was declared bankrupt, he might lose his family home and other assets under his name. What was more discouraging was the fact that Mr. Yap might very well be in trouble with his employer and stand a chance of losing his job if he was made bankrupt. The stress prompted him to seek help from AKPK as his family’s well-being was now threatened.

The agency took a few different approaches in resolving his predicaments. The first approach tackled Mr. Yap’s position as a guarantor for his deceased brother’s home and the loss after sale of the property. The agency managed to get creditors approval for a full waiver on the penalty interest and other charges pertaining to the debt. Additionally the bank also waived 50% of the principal on the loss amounting to over RM 70,000 and agreed that the balance of the loss will be paid with monthly installments of RM 500 over a period of 8 years.

On his own hire purchase loan, the applicant was advised to relinquish his car back to the bank as the monthly repayments were putting a strain on his finances. The savings on these monthly installments would help Mr. Yap improve his monthly cash flow and help settle his finances. Mr. Yap was also advised to liquidate his unit trust and use these savings to settle smaller credit card debts with 3 different banks. For bigger credit card outstanding and personal loans with 4 different banking institutions, the agency managed to negotiate a low monthly installment for Mr. Yap with only 6% interest for a period of five years. Mr. Yap is now far from facing bankruptcy charges and is leading a manageable life with his finances through prudent financial advice from AKPK.