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Settlement of a 14 year-old bank debt

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asked on Jul 4, 2020 at 21:12
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edited on Jun 5, 2021 at 21:48
 
I received a call from Aiqon company claimed that Ambank had sold off my credit card debt of 14 years to them. There was no communication between the bank & me for 14 years. The amount owed as I remembered was around RM2k & the card limit was around RM3k. Now they are asking for RM50K. I really just want to settle the amount & move on, so I negotiated with them to come up a reasonable amount. I am jobless right now & since end of last year. I would like to know what is the lowest amount I should be paying to settle off the debt & how I can negotiate with these people? How does the Limitations Act apply in my case?
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answered on Jul 5, 2020 at 11:31
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edited Jun 3, 2021 at 21:38
 
@Helpmeplease

How does the Limitations Act applies in my case. 
so I negotiated with them
By communicating with the "new" creditor, you have already reset the period of the Limitation Act and perhaps, have given them your current address.

If you cannot pay the RM50K "debt" being seek for, either:
1. Ignore any future correspondences or calls..
or 
2. Negotiate for a RM5-10K settlement (if you can afford)

(Caveat: The above comment is written by a Q&A registered User. It represents a personal point of view and is in no way associated with others in this forum nor be regarded as legal advice)
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answered on Jul 5, 2020 at 18:33
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edited Jun 3, 2021 at 21:39
 
Hi @jeff005,

Thank you so much for your reply, I actually didn't give the new creditors my new address. Only spoken on the phone. This is the 1st call after 14 years.

The actual amount of the debt was on RM2k. However the card limit was RM3k 14 years back. I can only afford to pay about RM3k, do you think that's possible? 
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answered on Jul 6, 2020 at 09:27
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edited Jul 6, 2020 at 10:27
by   Keribang
@Helpmeplease

First, the disclaimer. I am not a lawyer or expert in finance law. This is just from my experience & knowledge gathered over the years. 

To answer some of your questions:

1.  Limitation Act 1953 which is the statue of limitation law for West Malaysia stated that statute of Limitation is 6 years. (Note : East Malaysia have their own Limitation Act) .  You can read further here:

http://www.agc.gov.my/agcportal/uploads/files/Publications/LOM/EN/Act%20254.pdf

Essentially, if any contracts, that had not been enacted or enforced for more than 6 years, it can no longer be enacted or enforced. Onus is on the party that wants to enforce the contract after 6 years to prove the contract has been serviced or acted upon in those 6 years. 

It's about fairness, if there's no Limitation Act, then a bank can give you a loan for RM2k today, when you don't pay, decided not take any action & wait 20 years, after which they come and ask for RM100k , charging you daily interest. 

The creditors are actually given plenty of time to take legal action to recover the debt  - 6 whole years. If they don't want to use the time given, it indicates to the Law /Authorities that they are not interested to recover the debt. 

This is in general. 

2. In a case of old debts or hutang lapuk, these conditions must be met first:

a. No payments was made for more than 6++ years. Which means the an act of default has been made on the contract.  Note : 6 years from the act of default or breach of contract, not from the start of the contract. 

b. No legal action was taken by the creditor to ask or recover the debt for more than 6++ years. 

Verbal communications I believe don't count.  - Read up on Ayzek case I linked below. The bank 'decided' to send a demand letter after more than 6 years and claimed this demand letter is prove that Limitaiton Act didn't apply or has been reseted. But the court did not accept that argument.

Thus, if one response to a debt collector that came after say 10 years, agree to a settlement proposal & sign the agreement and proceed to make first payment even an official RM1 payment, the Limitation Act is negated or reset back to 0 days. 

Read Ayzek case here :
https://www.lawyerment.com/answers/questions/10205/credit-card-fight-with-affin-bank?g=1#tab-top

3.  So, in your situation, the way I see in IMHO, you have the following options:

Option 1

Wait for this debt collector to "officially" sue you in court then fight them there, as Ayzek did above.  If you have your own  lawyers, they can fight on your behalf as well. 

The caveat here is you must know that you're being sued. Either the Writ of Summon delivered to you at your current address or previous address. If they can't deliver it to you, they'll advertise in the newspaper.  You or your solicitor must be present to file your attendance and contest the Summon so you won't get Judgement in Default (JID). Again read Ayzek case above. 

Extra note: You can use the CTOS app (iOS & Android) to  check if any Writ of summons, bankruptcy proceedings etc have ever been made against you. Pay RM28 for very the latest report. Easy & fast. 

But IMO, they won't go thru the "official" legal route because if their lawyers give good advice (or don't want to just get easy fees from them) , they know the Limitation Act is against them. 

So usually debt collector will use "harrasament" tactics - calls, visits etc to wear you down and see who blink first. If they can get you to pay any amount, they manage to get the Statue of Limitation reseted.  

Usual statements - " We'll give you super duper discount (on the inflated amount remember), then pay monthly & we won't take legal action against you." 

- Another note : Debt collectors bought the debt usually at principle value or at discounted value. So for example, a RM2k debt, bought at RM1.8k. Then try to recover RM50k. Any amt above RM1.8k they're making money. Above RM10k, they'll be dancing in the street with glee. 

Option 2

Agree to their proposal and start paying. But make sure you get a lawyer or a friend who's a lawyer or ask expert forumers here (not me lah) , to go over the proposal, make legal agreement from your side that, once all is settled, they can no longer bother you. 

At the end of the day, the choice of action is yours. 

Good luck. 
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answered on Jul 6, 2020 at 12:10
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edited Jun 3, 2021 at 21:42
 
Dear @Keribang,

Thank you so much for your reply & very helpful elaborated explanation. It meant the world at a dark time like this. The truth of the matter is I could not afford to go through option 1 as I have no money for all the legal fees. This morning Aiqon called back claimed that they could not reduced the amount to lower than RM15k, my heart sank. I could not afford that amount. I told him, all I could pay was bout RM3.5k as I don't have a job at the moment. This is the truth. I do not want to run from this demon of the past. No matter what, the reality is I owed the money, I am willing to pay but RM15k is really impossible amount. For me to take up Option 2 to settle off RM15k is only possible if I have a job. Now at the moment the only option is to pay what I have & move on. So I asked them to reconsider the amount they are willing to reduce to to settle off. Now in pins & needles waiting for them to come back to me.

They claimed that they are unable to reduce the amount because there is a judgement against me, which I didn't receive anything because I shifted from the address they have more than 10 years. They say the amount for all legal fees is RM5-6k. Not sure how true is this.
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answered on Jul 6, 2020 at 12:58
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They claimed that they are unable to reduce the amount because there is a judgement against me.

Judgement cannot be used after 12 years.
It is as good as toilet paper now.
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answered on Jul 6, 2020 at 13:00
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edited Jun 7, 2021 at 18:42
 
@Helpmeplease

However the card limit was RM3k 14 years back. I can only afford to pay about RM3k, do you think that's possible?

Personal opinion (case to case basis):

1. This type of "Debts buying" from Banks originated from USA.

2. Do your own research (Google) as how those Americans deals with it. The personal info you have provided is not enough to provide better advice. You may have other Credit Cards with other banks.

3. The Limitation Laws differ from country and modes of collection.

4. In some countries, both verbal and written correspondences are accepted in the respective court of laws. Debt collection agencies have recorded all their calls to their debtors. Google (use translators for their court cases).

5. Bank debts (Secured Loans and unsecured loans) can be sold via a Vesting Order (as in Malaysia). The loans can be sold 3-5% of the registered debt.

6. Aiqon has offered about 33% (1/3) of the debt, work downwards the figures.

7. In your situation, Aiqon is no longer a debt collection agency, but as your creditor to unsecured debts, as such they can and have to bring a lawsuit (whether worth it or not depending on your personal circumstances). Nothing personal with the bank, they have to get rid of those doubtful debts with "their" SOPs. They have to sell in bulk, like it or not (no choosing by the buyer).

8. Debts buying is not new in Malaysia, except Aiqon is more aggressive during these bad times and is buying from several other banks. Their legal and/or illegal tracing of debtors is more advanced than other collection agencies. If Aiqon has not been successful with their collection methods, why would they be so stupid to buy new "bad debts". Putting good moneys on bad moneys? They may have found a way to circumvent behind the Limitation Act as obviously so in the Limitation (Amendment) Act 2018. This amendment is in favor of creditor banks as some law firms have commented online.

9. Do your own research and read my past postings on how I avoided these debt collectors, however, they have found me several times before. Match your researches with your circumstances and you may found a way (as I did) to avoid intimidation and harassment and even lawsuits.

(Caveat: The above article /comment is written by a Q&A registered User. It represents a personal point of view and is in no way associated with others in this forum nor be regarded as legal advice)
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answered on Jul 6, 2020 at 13:34
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edited Jun 4, 2021 at 14:24
 
@Helpmeplease

They claimed that they are unable to reduce the amount because there is a judgement against me

Personal Opinion:
For your default at a limit of RM3K, I doubt the bank has started any lawsuits against you before. If they have done it, they could have easily written off this debt (legally) after a few years ago, there is no need to sell your debt and a need to be made a Judgement Debtor a second time. 

Aiqon is just threatening you. You cannot be made a Judgement Debtor twice (for the same debt). It is obvious that nothing was done by the bank in the past so much so that this debt have now become RM50K.. There are another 2 other Limitations Act from date of Judgement Debt. Debts Collection has to follow the process of litigation laws.
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answered on Jul 6, 2020 at 13:53
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edited Jun 4, 2021 at 16:02
 
@william chan,

Thank you for that info. Any tiny bit of info will be great help. This applies if they send it to my previous address that I had shifted from 12 years ago right? Aiqon claimed they issued the Judgement to the old address in 2014 which I am not aware of. 

@jeff005,

For your default at a limit of RM3K, I doubt the bank had start any lawsuits on you before. If they have done it, they could have easily written off this debt (legally) after a few years ago, there is no need to sell your debt and a need to be made a Judgement Debtor a second time. 

They claimed that they bought the debt at RM42k from the bank. But my credit card limit was only RM3k.

I read @Ayzek & @Aurora cases & did some research online but being really clueless on legal things, I really need some help. Sorry if it seems that I am slow & oblivion. The circumstances for me also changed from the 14 years back version of myself. At that moment I was evading my responsibility & couldn't pay. Now 14 years after, I just want to settle it & move on. 

I would like to know what other info that I can provide to shed some light to my case. I used to have a RHB bank credit card debt that I settled & paid off 2 years back. I negotiated to the amount I can afford & got the release letter. But that time I was with a job. Now I'm jobless & looking for one. 

I really want to thank all for your replies as I really felt lost & hopeless at the moment.
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answered on Jul 6, 2020 at 15:34
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edited Jul 6, 2020 at 15:35
by   Keribang
@helpmeplease

Here is a link to the LIMITATION (AMENDMENT) ACT 2018 if you wish to study it.

http://www.federalgazette.agc.gov.my/outputaktap/20180504_A1566_BI_Act%20A1566.pdf

Also, as per my previous post, you can download the CTOS app, and buy your latest CTOS report. Any judgement against you will be reported in it. 
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answered on Jul 6, 2020 at 16:20
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edited Jun 4, 2021 at 16:09
 
@Helpmeplease

I read @Ayzek & @Aurora cases & did some research online but being really clueless on legal things
This is what I meant on "based on your own personal circumstances". Not every case has the same issues and amount asked for repayment.

I would like to know what other info
Basically I just want POId (Proof of identity).
I wouldn't want to be talking to someone who may work for Aiqon.
It would be silly of me not to know that debts collection agencies, banks, legal firms do read this website on a regular basis. Their operators would improvise and threatens the next person.

You can send me your personal info via this website:
https://www.lawyerment.com/library/kb/authors/10
Click on the "Send Message". You need to submit your real email address and relevant details. Every discussion will be only You & Me, not shown online or in public. Everything is private and confidential.
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