7 Tips on Bankruptcy in Malaysia Discharge Disqualification Annulment Lawyers

Bankruptcy-WBankruptcy Discharge

马来西亚破产报穷法令简介-中文版

Versi Bahasa Malaysia

Discharge after full settlement with Creditors Assisted by Lawyers

For information on the above click here.

SOCIAL GUARANTOR AND AUTOMATIC DISCHARGE

For information on the above click here.

Discharge & Annulment with Assitance of Lawyers

The article below sets out some general information in relation to Bankruptcy in Malaysia, including the Act of Bankruptcy, Disqualification  and Discharge from Bankruptcy.

 

 

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.

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.

 

Bankruptcy
Bankruptcy

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

See the Reviews from our clients

(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;

(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.

 

Get a FREE NO OBLIGATION Quotation for your matter...

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.

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-

(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-

(a)     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.

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

(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;

(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.

(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.

See the Reviews from our clients

Disqualification as Director and Bank Signatory

Generally a bankrupt may not be a company director and bank signatory, it will be embarrassing if the bankers should write a letter to inform the respective companies that cheques issued by a particular person  is no longer valid.

 

Discharge as a Bankrupt With Assistance of Lawyer

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

 

Sort Comments

92 Thoughts on 7 Tips on Bankruptcy in Malaysia Discharge Disqualification Annulment Lawyers
    Elinor
    4 Jan 2018
    10:45pm

    Hi,
    I am a declared bankruptcy for more than 5 years due to many personal reasons.

    I need to travel abroad in later this year and need your advise. im in between jobs at times and this current job i hope to retain for long and make me able to be ‘breathe’ again.

    Kindly advise

      Alex Chang
      1 Jan 2018
      9:58pm

      Dear Reader
      Thank you for submitting your question.

      A bankrupt may apply to the Director General of Insolvency, DGI
      for leave/ permission to travel overseas, subject to the terms and conditions
      set out by the DGI.

      We are happy to help, for a small fee please Whatsapp/ Viber us at +60122273289.

      Thanks again.
      Best Regards

      Alex Chang
      Alex CHANG & Co
      Cell/ Whatsapp/ Viber +60122273289
      HK: +852-8170-3389
      http://alexchanglaw.com/index.php/disclaimer-terms-conditions-website-electronic-communications/

    aitee
    27 Oct 2016
    2:52pm

    Hi,
    my father, mother and sister are bankrupt and their bankruptcy reached 5 years soon (by the end of Dec 2015).

    My father (54 years old) was business man previously and he use my sister’s and mother’s (52 years old) name for other company and bank loan too.

    At the end all of them became bankruptcy. One of the reasons is that we were betrayed by a partner in the business; at the end my family had to bear all the loses as their names were registered in the company.

    Because of this, we have tried many lawyers in the hope to get my sister discharge from bankruptcy as she is still young at only 27 yeas old.

    She is working in travel field and it block her from travelling around and facing alot of restriction. She been sued by 2 company with amount RM50K++ & RM800K++, one of the debtor did hire lawyer and they insist don’t wan to settle. We also do not have so much money to clear the debt. I have search around and heard that after 5 years, they may have the chance to apply for discharge from bankruptcy. May i know is there any way to get my family discharge from bankruptcy? or is there anyway to get discount from them? Do really hope you may help. Thanks. Please do contact me if you may help on this case.Hi,
    my father, mother and sister are bankrupt and their bankruptcy reached 5 years soon (by the end of Dec 2015).

    My father (54 years old) was business man previously and he use my sister’s and mother’s (52 years old) name for other company and bank loan too.

    At the end all of them became bankruptcy. One of the reasons is that we were betrayed by a partner in the business; at the end my family had to bear all the loses as their names were registered in the company.

    Because of this, we have tried many lawyers in the hope to get my sister discharge from bankruptcy as she is still young at only 27 yeas old. She is working in the travel industries and the bankruptcy blocked her from travelling and imposed many restrictions.

    She has 2 creditors amounting to RM50,000; RM800,000, one of the creditors did hire a lawyer and they are persistent that they don’t want to reach a settlement with our family. We do not have sufficient to clear the debts.

    I heard, after 5 years, they may have the opportunity to apply for a discharge from bankruptcy. May I know to apply for a discharge from bankruptcy?

    Is there anyway to get a discount from the Creditors?

    Do really hope you may help. Thanks. Please do contact me if you may help on this case.

      Alex Chang
      29 Oct 2016
      10:01am

      Yes we are able to assist you in the application for a discharge provided certain criteria are met, it is also possible to appeal to the creditors for a discount.

      Please contact us for more details.

    Kanga
    15 Mar 2017
    2:28pm

    Hi Sir, I have a hired purchase loan with one of the bank. The bank’s officer called me last week and informed me that they want to file a bankruptcy proceeding against me due to my bad debts above RM30,000.

    My car was repossessed in December 2015. I went to the bank a few times to negotiate the payment of the total outstanding sum but it was turned down and the bank demanded that I pay the full outstanding amount.

    When my car was repossessed, the value of the car was around RM20,000.00 to RM25,000.00 and the bank refused to accept my proposal. The bank mentioned that the car will be auctioned, and once the car has been sold, they will inform me of the balance amount I need to pay. But on the last occasion I spoke to the bank and the bank claimed that the my car has been disposed.

    The bank is demanding that I pay the amount of RM65,000.00 to clear my bad debt and to avoid a bankruptcy proceeding filed against me. I am told by the bank’s officer that I will personally go to the bank and get more details. But the bank’s officer said that there is no point for me to go the bank as they have decided to file a bankruptcy proceeding against me. The bank’s officer asked me to settle the sum of RM32,000.00 within 3 days to avoid a bankruptcy proceeding filed against me which will take effect by this month. Please assist me and how can I….

      CHOW
      29 Mar 2017
      10:22pm

      Dear sir,

      Before the bank can file a bankruptcy proceeding against you, the bank must first file a suit and enter judgment against you. You have to check if you were served with a writ of summons from the bank. If you have, then whether the bank has already entered judgment against you.

      Once a bankruptcy proceeding is filed against you, the bank will have to serve on you the bankruptcy notice and the creditors’ petition. Therefore you will have to keep a look out for these documents.

      With respect to the bank’s demand, please check with your bank the breakdown of your debt, that is how much has been paid and what is the outstanding sum. There is no reason why the bank should refuse to provide you the details of your outstanding debt. You should request from the bank a proper statement of accounts with respect to your debt.
      Thanks
      Best Regards

      Alex Chang
      Cell/ Whatsapp/ Viber +60122273289
      HK: +852-8170-3389
      http://www.AlexChangLaw.com
      http://alexchanglaw.com/index.php/disclaimer-terms-conditions-website-electronic-communications/

    Mandila Jackson
    8 Oct 2016
    10:14pm

    TҺanks for offering tһіs kind of ցood cߋntent.

Leave A Comment

Note: All fields are required. Mobile number for WhatsApp for clarification of your comments. Email and phone will not be publish.
(Required)
Mobile number for WhatsApp in order for us to clarify your comment, if necessary.