Debt Relief Plan (DRP)
Debt Relief Plan (DRP)
When you are plagued with debts, you will find that they seem to take forever to be repaid no matter how hard you work. When the interest is layered with more than one debt has not been settled, you have to assume another debt, you may face the possibility of bankruptcy, which will seriously affect your daily life.
To get rid of this constant financial burden, and especially for those who do not want to file for bankruptcy because it negatively affects your reputation and professional standing, you can consider the route of formulating a Debt Relief Plan (DRP). To know whether a Debt Relief Plan in Hong Kong is the best solution for you, you have to understand the details.
What is a Debt Relief Plan (DRP)?
The Debt Relief Plan (DRP) is one of the commonly-used methods of debt restructuring in Hong Kong. It is considered a simplified version of IVA, but unlike it, a DRP does not need to go through any legal procedures, and the debtor retains a high level of control when applying for the plan.
The debtor does not need to find a nominee or intermediary, and can directly negotiate the repayment plan with individual creditors. As long as all sides agree, they can establish a new plan and just pay a monthly fixed interest rate and amount according to the approved plan. The debtor can resume a normal life without the need to go bankrupt.
For some Hong Kong debtors, the Debt Relief Plan is more suitable than the voluntary agreement mentioned above for restructuring their debts. If the number of creditors (including banks, financial institutions, etc.) is relatively small and these creditors are also willing to accept the arrangement of a Debt Relief Plan (DRP), then debtors can choose to use the DRP method. In addition, the DRP method has a lower application fee and a shorter application time. For example, some applicants with current jobs in the financial industry or the disciplinary force would choose the DRP method because their employers would not be notified. On the other hand, the voluntary agreement method would notify their employers and may result in loss of work. The debtor must provide all personal debt information records for our DRP HK professionals to thoroughly analyse their suitability.
What’s more, the DRP method does not need to appoint a nominee to draw up a repayment report on behalf of debtors. In addition, the DRP method does not need to hire a lawyer to apply for interim orders in courts, and negates the need to go to courts to hold any creditor meetings.
The debtor only needs to prepare a proposal explaining the debtor’s ability to repay, the amount of repayment, interest rate, schedule and the method of repayment. After that, our company will submit this to the individual creditors independently, and directly negotiate with them an agreement that is in the best interest of both parties. The whole process takes about one and a half months to two months.
Once the agreement is established, the debtor will then sign a new repayment agreement with the creditor and implement the new repayment scheme under the DRP HK plan, and provide repayments directly to creditors involved.
After reaching a new repayment plan through the Debt Relief Plan (DRP) method, the debtor can greatly reduce their interest payments and can likely repay all debts within several years, while maintaining a reasonable standard of living.
This route is especially suitable for debtors in sensitive industries, such as banking, insurance, finance, disciplinary forces, and etc. A DRP is also a low-cost option without the administrative fees of other methods. Furthermore, DRP in Hong Kong has a lower risk and a higher success rate.
Application Qualification for DRP in Hong Kong
|DRP in HK is especially suitable for:|
- Applicable to one or more creditors
- Those with debts <100k but must be >10x monthly salary salary
- Very suitable for sensitive industries. (E.g. bank staff, disciplinary forces, etc.)
Benefits Offered by DRP:
- Can choose to restructure a portion of outstanding debt
Able to keep a selected number of credit cards or loan accounts.