Thursday, April 11, 2013

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!


Alvin Lim said...

i hope i don hv to call AKPK :P but it's a good thing we have this kind of thing. :)

ChampDog said...

Only if you fail to pay your debt, then you will need to or else they probably won't entertain you. :)

Surprisingly, there are quite number of people when I visited the briefing session.

That means many people are having troubles on managing credit cards debts.

I think the key thing of using credit card is you spend money without touching it physically, so you have no idea how much you have spend. Guess, that causes many fail to manage it properly.

Alphonse said...

This is cool!

maveric said...

@ CD

You actually helped your father-in-law to apply for this DMP @ AKPK...!!??

I would have thought that people closes to you would have received your close guidance,counseling cum advice on financial matters ...& never would need to be entrapped in a debt quicksand ..

ChampDog said...

Yes, I did. :) It is a good experience for both of us.

Not really la, I don't think I'm that "proactive" until I offer myself to them on how to manage their money. :)

Furthermore, I"m not in this field also.:)

Unknown said...

If I didn't make payment to akpk since I apply for it , will they take any action to me or effect my family ?

ChampDog said...

It is better you do and if you don't, it is better you discuss the reason with them. This is to avoid you're being blacklisted.

It should just affect you only, not your family. Hope that helps.

beehaa said...

I cant afford to pay rm600 that counsellor tell me to. I really regret that i dont negotiate to make it lower payment. Since i have register online but not yet pay the 600 can i make a request to lower the payment?

ChampDog said...

They usually calculate your income to make sure you're about to pay for the RM 600.

If you really can't for a valid reason, you should discuss with them again.

Good luck! :)

Anonymous said...

We are paying 1500 every month, can we discuss with the counsellor saying that we cannot manage this it lower will they understand? Or will be adamant asking us to pay...

ChampDog said...

What is the reason? I guess you may just need to prove it to them that you can't afford. If it is valid reason, I "think" they can just lower down for you. It will just take longer time to clear your debt.

Anonymous said...

Is our bank notify immediately of our AKPK DMP approval? How did you go about checking your in law proposed interest rate, outstanding etc? Did you call the counsellor or did the bank contact your father-in-law about the restructured debt via letter/call? As what we are told in the briefing and counsellor, this DMP prevents further legal the effect is as soon as the DMP is approve, right?

ChampDog said...

The AKPK will notify you once your application is approved. Yes, no more legal action after that.

Anonymous said...

I actually asked my counsellor abt my restructured debt, interest rate etc since it has been approved,but he told me my bank will contact/liase with me in due time......and that my bank will also notify me abt the terms and conditions. Fyi, my debt was a bad debt that has been write-off. So, was wondering if all applicants get a notice from their bank abt it? Cos I really hate to call up the officer in chage of my card to talk. Tried calling him the past week but he was on leave for weeks, and after his return his phone was constantly engaged! So no answer...

ChampDog said...

How long you apply already? Maybe you can wait a little bit longer. Did you get an instruction from them how to transfer the money? Sorry, I can't help much. It has been quite some time for me already. :D

Anonymous said...

3 weeks ago and it was approved last week. Since I get no answer from the bank officer yet and my counsellor directs me to him, I figured I'll just search online and see what others do/get after the DMP approval letter. Pay by cash deposit machine. No worries, champdog.

ChampDog said...

Wish you can pay it off very soon! :)

Anonymous said...

What happens when during the repayment period you pass away? Does the debt pass on to your family?

ChampDog said...

I think no, your debt belongs to you. But if you have property or any assets under your name, I"m not sure. Those assets may be taken by bank.

John Reux said...

I will just share my experience here. It was a quick process for me, I actually intended to attend the briefing session on Tuesday morning and due to heavy rain and massive jam, I was late for 10 minutes so I was not allowed to enter the briefing. As I was about to leave the country that time to work, I called up the officer and explained my situation, the officer in charge asked me to see one of their counselor immediately and upon discussing, he scheduled an appointment with me for the next day and asked me to come back with full set of documents. To say that they are efficient is short of complimenting them, my whole process took only 20-30 minutes and I can start make payment the very next day. It's a long road to reconciliation but I am looking forward to get back on track with my life.

I have several questions though:

During my application, I noticed the counselor stated amounts higher than my actual debts to banks, does it means that I will be paying more than what I owe?

I was told that I can make early settlements with banks directly if I wish to, but I am wondering if I can pay off bits by bits to banks instead of one lump sum to reduce my commitments in the long term?

I've read here and there that even after completing DMP, it will be hard to obtain any future CC/loans, is that true?

Finally, the interest rate for the entire DMP works out to between 4.5-5 percent per year, much lower than bank interest rates.

How do they actually worked out that fast without even sending any letters to banks? I was astonished at the speed of the process. Is it because I never made late payments and have a good track record in serving minimum payments? It seems they have a pre-default rate for DMP?

ChampDog said...

Thanks for the sharing. I tried to answer some of the questions that you have based on my best knowledge or my personal opinion. You may need to confirm that.

(1) I think higher debts than your actual debt is fine. I remember last time we also have higher debt than the actual one because we already pay off some of it. The key thing is your estimated debt shouldn’t be lesser than the actual. So if it is higher, I think it should be fine.

(2) You definitely can make early settlements. Paying off bits by bits is possible too. That will eventually reduce your pay off period.

(3) I’m not sure whether after completing DMP, will your credit record still be impacted. I “assume” yes because you did it badly in the past unfortunately. However, I also heard that there is certain period and after this period, they won’t consider it anymore as long as you have good credit record within this period. Maybe is 2 years? I really don’t know. :)

(3) 4.5 -5 % is pretty low. How did you get it? Maybe this is the default one now?

(4) They work out fast because this is something that came out from bank Negara. All banks will usually (maybe 100%) just approve it.

Hope that answer your questions. :) Good luck!

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