How the feeling when you got tree reprimand letters, say that they will liquidated your house as the collateral of the loan you borrow. You should be panic or say a loud prayer for help and try to prevent the liquidation or at least to negotiate for renewal or lengthen the time period.
As an ex Banker, I never ever experienced liquidate any borrowers houses to repay their debt. But after retirement and run my own business, the Bank will executed my house, where we live. What make it as a sad story is that the Bank was where I worked before retirement and the branch manager is my own subordinate when I was as a branch manager in central Java.
The Bank stick to the contract signed the date line or the time period of regular installments, monthly, 3 months or other arrangements. Generally speaking, the lender send 3 letters and approach the borrower to reprimand before doing the liquidation.
The costumers usually agree to pay as soon as they can but neglected to do with many reasons such as economic condition, fall sick and other reasons. But for my case, unable not unwilling due to economic crisis hit Asia and Indonesia in medio 1997 ago.
It was my experienced when I borrow a working capital loan from Bank BRI Tanjungpriok, North Jakarta for Rp. 250 millions, equivalent to US.$.125.000 in 1995 (US$.1 = Rp. 2.000) for 3 years. In the 2nd semester of 1997 economic crisis erupted in Asia, including Indonesia and my company stop operation in rental heavy equipment in Jakarta port. The equipment, two units Stacker use for Container handling purpose only.
When US$ rate increase from Rp.2.000,- up to Rp. 15.000,-/US.$, import goods almost stop, no businesses could afford to buy such expensive import goods, including industry material. My equipment depend solely on import goods. In another hand, I have two obligations to pay at the same time. Repay the investment loan monthly basis for Rp. 75 millions to the Leasing company plus monthly installment for working capital to Bank BRI.
Thanks God, in this case, I could settle the leasing contract, since the collateral are the equipments itself and we could just hand it over back to the lesser, the leasing company. But for Bank BRI was different, we surrendered the house title (Certificate) to the Bank. After the due date,legal matter, the Bank have the right to liquidated the collateral, our house where we lived.
Referred to a new regulation, in year 2000, two years after the due time, Bank BRI transferred their right to BUPN, a special Government body, to collected, liquidated our house at Kelapa Gading.
It’s a very hard time for me to negotiate back and forth to Bank and BUPN officials to postponed the liquidation for some time, since we have a pending cases in the court, sufficient to repay the loan.
Fortunately, thanks God, the court settle our case in the right time, in year 2000, so we could pay the loan before they liquidate time as scheduled. We win the court Rp. 1 billion case and paid Rp. 125 millions right away to get the land title back to our hand. It took time and effort to settle the case and make head ache as well. The sad story turn to be a happy ending
The funny thing in this case is that my self was a Bank BRI retirement in 1995 and got a loan from Bank BRI, where the Branch manager was my ex staff when I was assigned as a Branch manager in Kudus, central Java in 1987. I talked to him and to his superior too, but they couldn’t do anything to help. I told the story to the Government body above, that I was a Bank BRI retirement, so they didn’t push me so hard.
Running own company after the retirement isn’t easy job to do especially unexpected happened, facing the economic crisis, no one knew, including Government. But a lots of experiences teach me to negotiate and never surrender in whatever the situation is going on. Any difficulties always have a way out. Running a company in a stable economic situation should be easier to manage. Just go ahead, don’t worry to face the business risk.