A debt relief plan is normally initiated by the borrower and evaluated by his or 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 a debt repayment proposal with instalments that suit your current repayment capacity for the lender’s consideration. Upon evaluating your debt repayment proposal, the lender may accept or reject the proposal, or negotiate with you for a higher payment amount.
Lenders may not immediately accept or reject your proposal. 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 self-empowerment.Learn More
As part of AKPK’s efforts to encourage borrowers to be in full control of their financial situations, this Self-Help Debt Relief Guide (SHDRG) aims to facilitate borrowers in communicating or negotiating directly with their lenders on debt repayment proposals.
Borrowers are advised to use SHDRG 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:
- Received a written reply from the lender concerned on the repayment proposal.
- Keep all correspondences, payment records and other documents related to the loan(s).
Steps for Self-Help Debt Relief Guide (SHDRG)
Here are the step-by-step guide for SHDRG which includes the suggested templates in support of your repayment proposals.
Step 1 Analyse Your Financial Situation
Prepare a monthly budget using Form A: Monthly Budget (Appendix 1). Take into account the 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.
Step 2 List Your Total Outstanding Debts (for multiple lenders)
Prepare a Debt Repayment Proposal using Form B: Debt Repayment Proposal: Multiple Lenders (Appendix 2).
Calculate pro-rata payment to each lender based on the formula in Appendix 3: Formula for Pro-Rata Payment Appendix 3: Formula for Pro-Rata Payment.
Step 3 Work Out Your Income and Expenditure Budget
Prepare your debt repayment proposal letters:
Step 4 Send Out Your Proposal Letter to Your Lender
Forward your proposal letter to your lender together with your:
- Income Statement
- EPF Statement
- Income Tax Statement
- Form A
- Payment cheque (if possible).
- Form B – for multiple lenders
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.
Note: Sample templates and steps only act as a guide. Make necessary adjustments to reflect your debt situation.Read FAQs