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Bankruptcy in Malaysia General Information

1     In Malaysia  the law  provides that the minimum sum of  debt owing by a debtor is  RM30,000 before a creditor may commence  bankruptcy  proceedings against the debtor.   The  creditor  normally takes a course of legal action  and obtains a judgment upon the debt.

For the full text in English click on the link below:

7 Tips on Bankruptcy in Malaysia Discharge Disqualification Annulment Lawyers


2     One of the possible  modes  of execution of judgment is a Writ of Seizure and Sale or the creditor  may   issue a bankruptcy notice  and serve the same on the debtor.     Upon the failure of the debtor to settle the debt in compliance with the said notice,  the  debtor   commits   an act of bankruptcy,     the creditor may  commence  a bankruptcy action against the debtor.





The Act of Bankruptcy

Ways in which an act of bankruptcy is committed


3     The act of  bankruptcy is required prior to the commencement of  any bankruptcy proceedings.  The debtor may  commit an act of bankruptcy in a number of  situations.   The categories of acts of bankruptcy  set out in section 3(1) of the Bankruptcy Act are as follows:


3(1)      A debtor commits an Act of bankruptcy in each of the following cases:


(a)     if in Malaysia or elsewhere he makes a conveyance or assignment of his property to a trustee or trustees for the benefit of his creditors generally;


(b)     if in Malaysia or elsewhere he makes a fraudulent conveyance, gift, delivery or transfer of his property or of any part thereof;

(c)    if in Malaysia or elsewhere he makes any conveyance or transfer of his property or of any part thereof, or creates any charge thereon which would under this or any other written law for the time being in force be void as a fraudulent preference if he were adjudged bankrupt;


(d)     if with intent to defeat or delay his creditors he does any of the following things;


(i)     departs out of Malaysia or being out of Malaysia remains out of Malaysia, or


(ii)     departs from his dwelling-house or otherwise absents himself, or begins to keep house or closes his place of business, or


(iii)     submits collusively or fraudulently to an adverse judgment or order for the payment of money;


(e)     if execution issued against him has been levied by seizure of his property under process in an action or in any civil proceeding in the High Court, Sessions Court or Magistrates Court where the judgment, including costs, is for an amount of one thousand ringgit or more;


(f)     if he files in the court a declaration of his inability to pay his debts or presents a bankruptcy petition against himself;


(g)      if he gives notice to any of his creditors that he has suspended or that he is about to suspend payment of his debts;


(h)      if he makes to any two or more of his creditors, not being partners, an offer of composition with his creditors or a proposal for a scheme of arrangement of his affairs, and such offer or proposal is not followed by the registration within fourteen days thereafter of a deed of arrangement with his creditors, in accordance with the rules for the time being in force for the registration of deeds of arrangement under this Act;


(i)     if a creditor has obtained a final judgment or final order against him for any amount and execution thereon not having been stayed has served on him in Malaysia, or by leave of the court elsewhere, a bankruptcy notice under this Act requiring him to pay the judgment debt or sum ordered to be paid in accordance with the terms of the judgment or order with interest quantified up to the date of issue of the bankruptcy notice, or to secure or compound for it to the satisfaction of the creditor or the court; and he does not within seven days after service of the notice in case the service is effected in Malaysia, and in case the service is effected elsewhere then within the time limited in that behalf by the order giving leave to effect the service, either comply with the requirements of the notice or satisfy the court that he has a counter-claim, set off or cross demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid and which he could not set up in the action in which the judgment was obtained or in the proceedings in which the order was obtained:

Provided that for the purposes of this paragraph and of section 5 any person who is for the time being entitled to enforce a final judgment or final order shall be deemed to be a creditor who has obtained a final judgment or final order;
于债主在依据一份没有被作废(法庭未曾宣告无效)也就是仍然有效的法庭最终判决或管令,或在法庭的应许下向在马来西亚的债务人根据本法令送交“破产通知书”勒令他偿还包括至今为止的利息与债务或命令中所要求支付的款项,或与债权人、法庭进行协商之 7天后(如果债务人是在马来西亚以外的其他地方就将看情况而定),如果他仍不服从通知书的条件,或让法庭满意他有能相等于或超过被索金额的反告,抵消或反要求权利以及看似沒有合理的希望能出庭进行抗辩或对法庭的最终判决提出抗议。


(j)     if the officer charged with the execution of a writ of attachment or other process makes a return that the debtor was possessed of no property liable to seizure; and for the purposes of this paragraph the date when the writ is lodged with the officer shall be deemed to be the date of the act of bankruptcy.


Bankruptcy Petition
4     After the act of bankruptcy is committed, the creditor files a Bankruptcy Petition.


Receiving and Adjudicating Orders
5     The Receiving and Adjudicating Orders, generally known as the AORO may be  granted after   hearing the Bankruptcy Petition if the creditor makes out sufficient ground against the debtor.

如果法庭满意债权人已经成功证明债务人犯下了破产行为以及他所拖欠的债务数额已被确定,法庭就可判下财产接管令 (Receiving Order)与审裁管令 (Adjudicating Order), 简称AORO。

Disqualifications of Bankrupt
6     The Disqualifications of Bankrupt   are   set out in section 36  of the Bankruptcy Act  as follows:


36(1)     Where a debtor is adjudged bankrupt he shall subject to this Act, be disqualified for-

6( )债务人一旦被判定破产,他将会丧失-);

(a)     being appointed or acting as a Sessions Court Judge or Magistrate;


(b)     being nominated or elected to or holding or exercising the office of Councillor of a local authority.


36(2)     The disqualifications to which a bankrupt is subject under this section shall be removed and cease if and when-

6( )一名破产人因破产所丧失的权利与资格将遵照第36(2)条例下被解除或停止当-─


the adjudication of bankruptcy against him is annulled; or


(b)     he obtains from the court his discharge with a certificate to the effect that his bankruptcy was caused by misfortune without any misconduct on his part.

( b)他可以在被宣布破产后的任何时候向法庭申请庭令来解除破产,法庭在聆听该申请时,必须考虑破产人的行为以及状况,然后决定准许或不准许该项申请。

36(3)     The court may grant or withhold such certificate as it thinks fit, but any refusal of such certificate shall be subject to appeal.


Consequences of refusal of discharge
7     The  Consequences of refusal of discharge of Bankrupt   are   set out in section 38  of the Bankruptcy Act  as follows:
7 载于破产法令第38条文关于破产解除申请被驳回的后果如下:

38(1)     Where a bankrupt has not obtained his discharge-

( )如果破产人的破产解除申请不被批准-

(a)     the bankrupt shall be incompetent to maintain any action (other than an action for damages in respect of an injury to his person) without the previous sanction of the Director General of Insolvency;


(b)     the bankrupt shall once in every six months render to the Director General of Insolvency an account of all moneys and property which have come to his hands for his own use during the preceding six months, and shall pay and make over to the Director General of Insolvency so much of the same moneys and property as have not been expended in the necessary expenses of maintenance of himself and his family;


(ba)     notwithstanding paragraph (b), the bankrupt shall immediately report to the Director General of Insolvency the receipt of any moneys, property or proceeds in any form from property the value of which exceeds five hundred ringgit and which moneys, property or proceeds do not form part of his usual income and the bankrupt shall, as soon as may be required by the Director General of Insolvency, pay or make over such moneys, property or proceeds to the Director General of Insolvency;

(ba)尽管条文(b)这么说,破产人必须通知和移交给破产管理官他所收到的任何价值超过500令吉以上非正式收入的任何款项或 财产并在破产管理官的命令下,越早越好,交还或转让那些款项或财产给破产管理官;

(bb)      the bankrupt shall immediately inform the Director General of Insolvency if there is any change of his home address;


(c)     the bankrupt shall not leave Malaysia without the previous permission of the Director General of Insolvency or of the court;


(d)    the bankrupt shall not, except with the previous permission of the Director General of Insolvency or of the court, enter into or carry on any business either alone or in partnership, or become a director of any company or otherwise directly or indirectly take part in the management of any company;


(e)     the bankrupt shall not, except with the previous permission of the Director General of Insolvency or of the court, engage in the management or control of any business carried on by or on behalf of, or be in the employment of, any of the following persons, namely-

(i)     his spouse;


(ii)     a lineal ancestor or a lineal descendant of his or a spouse of such ancestor or descendant; or


(iii)     a sibling of his or a spouse of such sibling.


(1A)     In granting permission under paragraph (1)(c), (d) or (e), the Director General of Insolvency or the court may impose such conditions as he or it may think fit.

( A)破产管理官可以在给予任何条文38(1)(c),(d)以及(e)批准中设下任何他觉得可行的条件。

(2)     A bankrupt who makes default in performing or observing this section or a condition imposed pursuant to subsection (1A) shall be deemed guilty of a contempt of court, and shall be punished accordingly on the application of the Director General of Insolvency.

( 2)破产人如果拒绝执行,服从或遵守此条文或任何根据以上38(1)(a)条文所设下的条件将会被视为犯下藐视法庭罪,并在破产管理官的呈请下遭受处罚。

Discharge as a Bankrupt

If you would like to find out about getting a Discharge as a Bankrupt please click on the article below to fill up a form.

Social Guarantor Discharge Annul Bankrupt Automatic Malaysia Query

*Chinese is a translation to the best efforts and if there is a conflict between the translation and the English version, please refer to the English version.


37 Responses to Bankruptcy in Malaysia General Information 马来西亚破产报穷法令律师

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