When you are charting you your career, it is very easy to go astray financially. In fact, once you start earning your own income, you want to buy this, go there, do that and everything else because you have the financial means to do so.
However, a lot of young people fall into the trap of spending more than they earn. When the situation gets tricky, they get into debts because it is so easy to do so. Banks today offer credit cards, personal loans which will give you that ‘additional funds’ when you need like holidays, upgrading your car and such. This might get out of control in time and before you know it, you fall into a downward spiral of debts which becomes almost impossible to get out of.
If you are unable to settle your debts through your monthly salary, the banks will continue to chase you and before long, you might have to consider bankruptcy. This should not be the case as there are agencies out there who can help like AKPK (Agensi Kaunseling dan Pengurusan Kredit) or Credit Counselling and Debt Management Agency.
AKPK is an agency which is established by Malaysia’s central bank BNM (Bank Negara Malaysia) to help you get out of any tight financial situation. AKPK does not pay your debts for you. It helps you to manage your finance better because a lot of people are weak when it comes to this issue.
You will need AKPK when:
• You are using one credit card or loan to cover the amount you owed in another
• You are constantly being chased by the banks to pay the ‘minimum’ amount
• You are having sleepless nights wondering how to finish paying off your debts
• You are ‘heavily considering’ asking loan sharks (Ah Longs) for help
AKPK will be able to help you through their DMP (Debt Management Programme). AKPK’s DMP is a very useful programme in which you can now pay your debts to the banks in a lower amount without having them chasing down your neck all the time.
How the DMP works is that AKPK will consolidate all your debts that include your outstanding credit cards and personal loan amounts. Housing and hire purchase loans are not included. AKPK will then calculate your income and the amount you need to survive and derive a figure which will be comfortable for you. This is where you need to be totally honest with your income and expenditure.
From there, AKPK will then inform the banks that you have loans with that you are with the DMP. Once everything is agreed, you only need to pay a lump sum to AKPK monthly and the agency will then disseminate to the banks accordingly.
Take note that being in the DMP does not mean that you do not need to pay your debts. You are actually paying your debts to the banks but in a longer term and one which is more manageable for you. You cannot apply for loans or new credit cards. You are not blacklisted or bankrupt but your credit history will have a remark stating that you are in the DMP which will deter the banks from giving you any more loans.
The most important factor when you are in AKPK’s DMP is that you cannot default the payments. Once you default the payment, AKPK has the right to nullify the agreement and you will be back to square one. AKPK is a non-profit agency where they do not earn anything from your payments. It acts as the middle-man between you and the banks you owed money to.