Bankruptcy: How much to settle?

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asked on Oct 8, 2010 at 14:14
by   eusoff
edited on Mar 5, 2018 at 04:08
Please anybody that have gone through this. I have been made bankrupt for RM40K debt. I will be meeting the creditors soon. How much do you all think the creditors are willing to accept for me to appeal for discharge. Is RM20K reasonable or normally the creditors will play hardball. Please help. Thank you in advance.
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answered on Oct 13, 2010 at 02:14
by   Pening
edited Mar 5, 2018 at 04:27
No harm if you want to offer them RM40K. I've already settled my debt RM12K out of RM26K with Ambank. First let them give you a settlement offer. After you get the letter of offer, you can send them letter to counter offer. It worked for me. At first Ambank offered me settlement amount of RM15K, then I sent them counter-offer letter for RM10K. But the final offer given was RM12K. So I've settled everything and now in the process of discharge.

Good luck.
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answered on Oct 13, 2010 at 03:59
by   B369
edited Mar 5, 2018 at 04:29

Can you post a copy of your counter-offer or appeal letter here?
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answered on Oct 13, 2010 at 04:15
by   B369
edited Mar 5, 2018 at 04:46
I have something to share, that the factsheet to deal with few banks.

Full and Final Settlement Offers

What are full and final settlement offers?

This factsheet explains how to make offers in "full and final settlement" to your creditors. This means that you ask the creditors to let you pay a lump sum which is less than the full balance you owe on the debt. In return for having a lump sum payment the creditor agrees to write off the rest of the debts.

You may be able to do this because you have come in to some money or have some savings you can use. Sometimes a friend or relative offers to put forward a lump sum to help you pay off the creditors. Your circumstances may be very unlikely to change for the better in the future. It is very important that you explain to the creditors that the money will not be available forever and the friend or relative will not make the payments unless the offer is accepted.

How to make an offer

* You can use the sample letter attached to make full and final settlement offers to your creditors. Make sure you keep copies of any letters you send.

* It is very important to make sure the creditor accepts your full and final settlement offer in writing. Make sure you keep a copy in case there is a dispute which can happen years later.

* Never send a lump sum payment before the offer is accepted.

* It is a good idea to get a third party such as a friend or relative to send the money on your behalf. This helps your agreement to be more legally binding if the creditor accepts the money via a third party.

* If you are settling a debt that is large or particularly important, you could have a formal agreement drawn up by a solicitor and signed by you and the creditor. This is not normally necessary.

* Make sure the creditor agrees in writing to change your credit reference file details to show the balance is "satisfied" and the date. Check this have been done by asking the credit reference agencies for a copy of your credit file.

How to work out offers of payment in full and final settlement

You may have a lump sum that you need to divide up amongst several creditors. The usual way of doing this is to make "pro-rata" offers. This means that each creditor gets a fair share of the money available. The creditor you owe the most to will get the biggest share of the money and the creditor you owe the least to will get the smallest share.

1. Find out the exact outstanding balance you owe to each creditor
2. Use the formula to work out how much to offer each creditor
3. Use the following example on page 2 to help you.




You may have £10,000 owing to 4 creditors. You can raise a lump sum of £4,000.

You owe:

    £2,300 to mastercard
    £ 1,200 to a catalogue company
    £ 4,500 to a loan company
    £ 2,000 to the bank.

Use the formula:-

    £4,000 (lump sum available) x £2,300 (debt to mastercard)

    ÷£10,000 (the total amount you owe to creditors)

    = £920 (offer to mastercard)

Your offer to mastercard is £920. You then do the same calculation for each creditor, using each individual debt in the calculation.

Your offers to your creditors should look something like this:-


MasterCard | £2,300  |   £920

Catalogue  | £1,200  |   £480

Loans      | £4,500  | £1,800

Bank       | £2,000  |   £800
Total      |£10,000  | £4,000

4) Send offer letters to all your creditors along with a table like the one shown above. It is helpful if creditors can see that they are all receiving an offer of a pro-rata settlement. Then they know they are all being treated the fairly. If some of the creditors refuse, then write to them again and ask them to reconsider. Point out if any of your other creditors have accepted the offer and explain your circumstances again. If your creditors still refuse Phone us for advice and see what other options you might have.

Remember: Do not pay the lump sum to any creditor that does not agree your offer in writing.

Sample Letter


Your Name:
Your Address:

Name of Creditor
Address of Creditor


Dear Sir/Madam

Re: Account No/Reference No:

I write with reference to the money which you are claiming on the above account.

I can confirm that I am unable to offer to pay the money which I owe in full (Add details of your circumstances and financial situation). However, I can raise £ (put the amount which you can afford to pay) and I want to offer this as an ex-gratia payment in full and final settlement of the account. This offer is made on the clear understanding that, if accepted, neither you or any associate company will take any other action to enforce or pursue this debt in any way whatsoever and that I will be released from any liability.

I also request that, if accepted, you will mark any entry on a credit reference agency file relating to the above account as "satisfied" in full.

Payment can be made within (put the number of days or weeks within which you will pay) of receiving your written agreement of this offer and method of payment.

I look forward to receiving your reply.

Yours faithfully

(Your signature)


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answered on Oct 13, 2010 at 04:39
by   B369
edited Mar 5, 2018 at 04:48
I'm currently serving AKPK DMP RM1,000 per month, but can't serve any more. And next, next year November will serve RM1,500.

I would like to negotiate "full and final settlement offer" as I post the website link.

@Pening, I need you appeal letter and how you start approaching the banks. Because I need to settle my highest debt RM51k, 2nd about RM30k, 3rd RM28k.
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answered on Oct 14, 2010 at 02:24
by   Pening
edited Mar 5, 2018 at 04:50
This is the letter of appeal that I've sent to them and after that they offered me RM12K as full settlement. But you have to follow up with them regularly.

Your Ref: 

18 August 2010

Ambank (M) Berhad
Retail Collection Centre
Level 32, Menara AmBank
No. 8, Jalan Yap Kwan Seng
50450 Kuala Lumpur

Dear Madam,


I refer to the above matters.  Thank you for your letter dated 16 August 2010, in which you agreed to the full settlement figure of RM15,000.00 to discharge the debt.

Due to my current unfortunate circumstances and dire financial straits I am unable to make the proposed payment. The absolute limit of my capability of borrowings from my siblings and relatives is a sum of RM10,000.00.

That is the only sum I can afford. It is my intention to discharge this debt at the earliest possible opportunity, and therefore, I assure you of my integrity and commitment to pay you the said sum of RM10,000.00 (Ringgit Malaysia : Ten Thousand Only) within seven (7) days of receipt of your approval.

Your kind consideration and approval shall be much appreciated.

Thank you.

Yours faithfully,

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answered on Feb 3, 2018 at 13:09
by   Jacky
I have also just settled with AmBank last week! The longer it takes,the harder for the settlement!
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answered on Feb 7, 2018 at 20:44
by   Ravin

Would you mind sharing, department consent for settlement. I have long pending dues and ready to negotiate for settlement, Thanks
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