Debt Relief Program - hklegal
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Application for Debt Relief Program (DRP)

  • A DRP is a debt relief program offered by banks and finance companies to debtors so that they can live paycheck to paycheck without going into bankruptcy, and at the same time repay their debts. The repayment plan is based on the individual debtor’s living expenses and repayment ability. Debtors who do not want to go bankrupt can consider using a debt relief plan DRP.

The Benefits of Debt Relief Program (DRP)

Understanding the five benefits of Debt Relief Program (DRP)

Eligibility for Debt Relief Program (DRP)

It is difficult to generalize the eligibility for the debt relief program (DRP). Each case is considered as an individual case, however you may refer to the criteria in the following for your reference:

Issues that may arise in family law

Documents required for debt relief program:

One-Stop Debt Relief Solution

Frequently Asked Questions (FAQs)

Frequently Asked Questions (FAQs) on Debt Relief Application

Some banks and finance companies want to avoid bankruptcy by offering DRP to people who have debt problems. However, some banks and finance companies do not accept DRP so that the applicant should check with an experienced lawyer before their further processing. The only difference is that after interest rate reduction and extension of repayment period, the repayment amount will be less than what you would have received and will be within your affordability.

Therefore, the DRP is like a protective umbrella that allows debtors to avoid bankruptcy and live a normal life with the compromise of their creditors.

A DRP debt relief program does not require all creditors to agree to it. Not all banks and finance companies accept DRP debt relief plans. If your debt is accepted by some of your creditors and not by others or on less favorable terms, it will be considered a success as long as your monthly repayment amount is reduced and you can afford it.

One of the major advantages of the Debt Relief Plan DRP is that the repayment terms are flexible and the repayment period and interest rate do not have to be the same according to the individual creditor’s terms.

In view of serveral problems, we have basically stopped offering IVA since 2008. Since the Asian Financial Crisis in 1997, Yip & Tang has been providing bankruptcy and debt restructuring services (DRP, IVA, Individual Voluntary Arrangement), and in 2002, we started to offer consulting services on Individual Voluntary Arrangement for IVA as well.

However, due to the high cost, slow progress and cumbersome procedures of IVA, the DRP (Debt Relief Program) has is seen as a better solution which has become the mainstream in recent years.

DRP debt relief program is a popular and viable option for creditors, which is cheaper, faster and more user friendly than IVA in terms of debt restructuring, and has many successful precedents.

Usually it takes 3-5 weeks.

The determining factors are:

  1. Who are your creditors?
  2. Number of debts
  3. Repayment Schedule
  4. Repayment History
  5. Living expenses and household burdens
  6. Industry Reflects Occupational Stability
  7. Whether the supporting information is sufficient, e.g. information relating to revenues and receipts from projects

This is because not all banks and finance companies accept the DRP debt relief program. Some finance companies that borrow money in the name of money lender will not accept it.

As there is a minimum wage in Hong Kong, a person’s monthly income is at least HKD 9,000. If the amount of debt is less than around HKD 50,000, the debtor may be ineligible for the program as he or she may have the ability to repay his or her debts; if it is beyond what the debtor’s capabilities, the debtor can only go bankrupt.

There is no public record of the DRP Debt Relief Program. Unlike voluntary IVAs, approved IVAs are available on a special public registry maintained by the Bankruptcy Service, and there is no such public registry for DRPs, which are private debt restructurings negotiated with creditors.

However, the positive credit database will hold records, which will be kept as per the credit data code and will not be made public, confidential and safe, thus it is quite advantageous for employees of the disciplined services, bankers and some professionals to adopt the DRP debt relief scheme.

Banks and finance companies participating in the DRP program will generally stop pursuing creditors, while those who do not participate in the DRP program will most likely stop pursuing creditors.

Not all banks and finance companies accept DRP debt relief plans. Basically, some finance companies that borrow money in the name of money lenders will not accept them. You must consult your bank lawyer before deciding on a DRP debt relief plan.

As there are no courts involved and no accountants acting as nominees, the DRP is quite inexpensive and it’s only around HKD 4,500 to HKD 9,500, whereas the total cost of an IVA is between HKD50,000 to HKD$100,000, including court fees, nominee fees, nominee monthly administrative fees and attorney fees, however the total charge is determined by the amount of debt and the repayment period.

Besides DRP debt relief plan, there is also IVA available for the debtors. If DRP debt relief plan fails, IVA is very likely to fail as well, therefore if the DRP doesn’t suit you, the ultimate solution may be going bankrupt. For further details, please feel free to consult with our experienced lawyers.

In our DRP cases, our clients were from different background, including civil servants (including disciplined services or civilian staff), public sector employees (e.g. HA), professionals (e.g. insurance agents, nurses, doctors, engineers, architects), clerks, secretaries, and so on, so occupation is not very important.

In our DRP cases, our clients were from different background, including civil servants (including disciplined services or civilian staff), public sector employees (e.g. HA), professionals (e.g. insurance agents, nurses, doctors, engineers, architects), clerks, secretaries, and so on, so occupation is not very important.

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