By Barney Almazar, Esq.

Are you regularly spending beyond your budget? Are you living from payday to payday? Are you unable to meet rent payments? Are you always paying only the minimum credit card bill? Are you not aware how much your total debt is? Have you maxed-out more than 2 credit cards? Are you consistently paying bills late? Are you hiding your debt situation from your spouse?

If you answered yes to any of the questions above, you really need to re-examine the way you handle your finances.

Contact the collections department of your bank and advise you would like to make a settlement.If you have defaulted on several loans within the same bank, inform the collections officer that you would like to settle all your loans. For example, if you have credit cards, personal loans and car loans issued by the same bank, you should settle all loans in one agreement—because the bank can still file a case against you for the other loans which you did not settle.

• How much is the outstanding balance per account?
• Have they filed a police case against you? If yes:
• Which police station?
• What is police case number?
• When was it filed?
• How much is the value of the bounced cheque?
• What are the available settlement options?
• Minimum settlement amount for one-time payment?
• Longest installment term and how much is the monthly payment?
• Minimum payment to release the police case, and what would be the payment terms for the remaining balance?

Once you have agreed on a settlement option, request for the settlement letter.Make the payment as per the settlement letter. Do not make any payments unless you have the settlement letter.Get the Release/Clearance Letter once you have complied with the payment terms.If you have a pending case, secure clearance from the bank’s lawyer.Present the clearance to the police station so your records can be cleared from the police and immigration systems.

For more information on Central Bank rules on debt collection, readers can visit or call 04-4492016.

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