AKPK's DMP Application Walk-through Experience

This post is for people who plan to apply for AKPK's DMP application. I just shared my experienced that I have gone through.

Last month, I went to Bank Negara in Penang to help my father in law for the DMP - Debt Management Program application under AKPK. I think it maybe a good idea for me to capture the entire process here. You may find it useful you plan to apply it.

Firstly, go to the AKPK website under the "Contact Us", decide which location that you want to go. After that, go to the DMP application process section and search for the toll free (i.e. 1800-85-2575). Call them and ask them when is the public briefing section. In Penang, the public briefing section is on Tuesday and Friday, start at 10 am if I remember correctly.


Summary of this Briefing

I try to remember as many as I can...

You must go to this briefing section. I personally think this briefing is extremely good. It tells you basic of personal finance!

• It explains in general why people fail to manage their money. What trick the banks try to convince you to buy their product? What is cash advance? What is their interest and the impact in your personal finance if you're in debt? Yes, it includes compound interest and the rest of the basic personal finance stuff.

• Next, it explains the impact or the standard procedure the bank will take if you fail to pay the minimum amount (i.e. 5%) of your credit card. At the beginning, they will give you warning (both verbal and written) for 2 to 3 months and if you still fail to pay, they will start kicking of the official legal process.

The legal process consists of following:

• Writ of Seizure and Sale (WSS)/Penghukuman Writ Penyitaan & Penjualan - The bank will get approval from the judge to allow them to sell all your assets to cover all the debts that you have. If it is still fail to pay off the debts, the next process kicks in.

• Judgment Debtor Summons (JDS)/Saman Penghutang - This will allow them to walk-in to your house and inspect whatever valuable assets that you have and to take it when necessary. According to the instructor on that the day, the purpose is not really to seize your assets but more on make you embarrassed to your neighbor.

• Bankruptcy Action/Tindakan kebankrapan - This is the last step if above 2 steps fail. You may want to contact AKPK as soon as possible to avoid this step but bankruptcy could be one of the options as well if you really can't pay the debt. AKPK will give you advice on whether bankruptcy is a right choice.

• At last, it explains the steps what you need to do for the AKPK's DMP application. The details as follows in summary...

After the briefing, you will need to schedule an appointment with a counselor. According to the instructor, it is not easy to schedule an appointment due to limited counselors. He encouraged us to call the toll free number non-stop until you get the appointment. Before the appointment, you need to make sure all the documentation is ready. There will be a form and a checklist of documentations that you need to prepare:

• CCRIS Report from Bank Negara Malaysia - it can be printed in any branches of Bank Negara I think. It is a machine and you just need to put in your I/C to print this report. Very powerful machine, because it can really print out all your debts including your car and housing loans as well.

• Latest credit card statements - bring all of them.

• Latest pay slip or anything that can prove your monthly earning if you're not employee.

• Photocopy of your I/C at both side

Since I didn't want to wait for another day, I cut queue by negotiating with the counselor directly.Luckily, I managed to slot in. But you can only do this when you have all the documentations ready. So, I settled this within a same day! :)

During the counseling, the counselor basically does not really give you counselling. They seem like just follow the standard process or protocol. What the counselor will do is make assessment on the proposal that they plan to negotiate with bank. I think usually is 9% of interest for 10 years. Then, he will just calculate whether it is feasible based on your current income. I think if you really need lower interest rate (e.g. < 9%), you will need to plan out your negotiation.

After that, he will give you and DMP reference ID for you to apply online. There is a PC there where you can login to the DMP website (he will give you the instructions). Basically, you just need to fill up all the information as stated in your hard copy application form. The only extra thing is the last page where you need to explain why you fail to manage your debt. You can put in bullet form so it is clearer.

The last step is bank in your first payment through Maybank within several days. Don't worry, the counselor will give you the instruction as well. You can pay through ATM machine or online banking. Finally, you just need to wait for the approval letter from AKPK in 2 weeks. Once it is approved, you make the monthly payment to AKPK.

Few notes:

• AKPK is a negotiator and they don't refinance your debt but more on helping you to negotiate with bank to get lower interest rate. If you want, you can negotiate yourself with bank too for lower interest without going through AKPK theoretically.

• If you fail to make payment to AKPK, they will blacklist you and not to help you anymore. So it is important if you unable to make the payment, you must inform them and negotiate with them again.

Good luck in your APKP's DMP application!

What is AKPK? Is It Really Needed?

AKPK stands for "Agensi Kaunseling dan Pengurusan Kredit" in Malay and in English, it is known as Credit Counselling and Debt Management Agency. I only know about this organization lately when I was trying to solve a debt problem for a relative. So I just share to you guys and this is only applicable in Malaysia.

This organisation is wholly owned subsidiary of Bank Negara Malaysia (National Bank of Malaysia) that basically provides help to anyone who has problem managing their own financial. The financial problems that I have seen so far are usually due to credit card debt. What you need to do is contact them and explaining your debt situation and they will help you to restructure your debts by negotiating on behalf of you with banks. For example, instead of paying for 18% interest, you may just need to pay for 9% after debt restructuring. Cool, isn't it? This service is called AKPK’s Debt Management Program (DMP).

There are 2 key exceptions where you can't enroll in DMP:

• You must have a job or income. If no, you should get a job first before approaching AKPK.
• Your debt must be legal and approved by Bank Negara Malaysia.

I think these requirements make sense because there is no way to manage your debt if you don't have income at all. Also, your debt can't be from "Ah Long" (Loan Shark). I cannot imagine how they can negotiate on behalf of you. :) But I guess if you really can't meet these requirements, you still can seek help from them on what to do next.

The only drawback of enrolling this DMP is you can't apply any kind of loan anymore unless you settle all the debts. I think this is good thing but some debtors may disagree because it constraints them from borrowing more. Hello, please wake up!

For the details, please visit: www.akpk.org.my. Look for Debt Management under the services category.


Wait! I Still Don't Get It

It may appear that AKPK is solution to many people who have credit card debt issue BUT let's think of it deeper again, why can't this be prevented before even going to AKPK stage? Can this be done?

Most credit card debtors (who fail to manage their debt) that I have seen so far  hold 5 to 6 credit cards. Why this is allowed?  Even 2 credit cards are consider a lot already in my opinion. I personally just hold 1 credit card. The question is why banks allow them to hold more than 5 credit cards at the first place? Another way to look at this is the maximum debt limit a person can borrow. For example, this person debt limit is $20K and it should always gap at $20k no matter how many credit cards he/she can hold. Can we set such rules?

If this problem be prevented, why this is not happening? Why must Bank Negara (National Bank) creates a solution while the problem can be prevented? Are they creating solutions that look for problems and ultimately create the problems by themselves if they don't exist? Are they doing this in purpose?

Oh okay I know, because banks want to earn too. They are in business and yet help to grow economy at the same time by encouraging people to spend over their limit if possible! This is how economy works? Win-win situation between Bank Negara (National Bank) and the rest of the banks. But wait, is the debtor win too?