“Dear Steve,
I unfortunately was diagnosed with cancer couple of years ago. Due to such unexpected illness, I incurred more than a million HKD debt to cover my medical bills. I am currently working but not enough to cover my debt. I’m still not fully recovered so I’m not sure if I can keep the payments.
I dont’t want to file for bankruptcy but I don’t know if I have other options. Would appreciate your thoughts.
Yogi”
Dear Yogi,
I’m so sorry to hear of your battle with cancer. I suppose the good news is that things appear to have worked out well in your fight against cancer.
You are lucky that Hong Kong kept it’s old British framework in dealing with debt once it was handed back to China.
In Hong Kong you can file bankruptcy and have your debt discharged. See the Official Receiver’s site for details.
But if you want to avoid bankruptcy your best option is an Individual Voluntary Arrangement (IVA). This process would allow you to enter into an agreement to repay your creditors over a five year period of time based on what you can afford to pay.
To arrange an IVA you would need to meet with a Hong Kong based insolvency practitioner. For more on the specifics of a Hong Kong based IVA, click here.
If you do decide to file bankruptcy, you would certainly not be alone. Current Hong Kong bankruptcy filings have risen 62 percent from a year ago.
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Thank you for your very prompt response. I still am fighting cancer that’s why it is much more difficult for me to repay my debt as I still have regular follow up check-up resulting to additional medical bills.
Question on the IVA, is this worth it? Would I be able to retain a credit card if I go for this or do I need to close and surrender all credit cards (even if not included in the IVA)? All my debt is actually personal installment loans so my credit cards or zero balance. Also, what is the typical percentage they require for repayment?
Thanks again!
If the bills are still building then maybe is not the time to do that.
No matter what you do any intervention with bankruptcy or IVA is going to close your other access to credit.
Your percentage repayment in an IVA will depend on your disposable income and what the creditors agree to.