Brief Answers to BIG Questions in Debt Recovery Malaysia

Debt Recovery

Brief Answers to the BIG Questions in Debt Recovery Malaysia



Does the Legal Process Start with a Letter of Demand

Yes. Usually.


Fundamental Question: if I sue someone will I be guaranteed a payment?

Before a credit  is extended, a creditor must conduct due diligence on their debtors and come to a conclusion whether, when push comes to shove (at the end of the day) can the debtors pay  the debts?

What a lawyer cannot do, is to guarantee a recovery. 


Writ of Summons vs Companies winding up Petition 

All debs recovery process in Malaysia   may start with a letter of demand followed by a  Writ of Summons to recover a debt against an individual or a company. 

On Writ of Summons click here.


The quickest way to obtain a judgment is via the summary judgment process. 

On Summary Judgment click here.


At the end of a  Writ of Summons process, the court may grant a judgment. 

You may execute a judgment by way of a bankruptcy petition, a Writ of Seizure and Sale, a judgment debtor’s summons, a garnishee proceedings or a companies winding up petition. 

On a writ of seizure and sale click here.


Alternatively you may commence a companies winding up petition against a company  in malaysia without first obtaining a court judgment. 

On Whether a Judgment is Required before the filing of a Winding Up Petition click here.

Companies winding up Handbook Malaysia 

There is a Handbook written on the companies winding up procedures in Malaysia.   Edited by Alex Chang 

See the foreword by Dato Gopal Sri Ram a former Federal Court judge.  

See also the foreword by Datuk Wira Low Hop Bing   a former  judge of the  Court of Appeal.  



Can I get interest  on a judgment sum?

Yes all judgments come with a 5% per annum interest from the date of judgment, some judges, if the circumstances is right,  may grant interest at an agreed rate from the due dates.

What can I get if a settlement is negotiated?

In any negotiations, the final settlement sums will be dependant on the skills of the negotiators and the strength of the case.  

The least desirable is a settlement after a “hair cut” (a discount from the debt owed);

The desirable settlement is one with a full settlement; 

The most desirable settlement is one with a full settlement plus interest and legal fees.  



Once A Court Made an Award Will It Be the End

No there are two levels of appeal.   From the High Court to the Court of Appeal and then to the Federal Court.

A High Court gave an award against our client to pay RM74 Million (USD18.5 Million), we set aside that award, the claimant appealed to the Court of Appeal and then to the Federal Court failed to reverse our setting aside.  At the end our client did not have to pay.

Enforcement of Judgment

You may enforce a Judgment by way of a Writ of Seizure and Sale. Please click here for more information.

You may enforce a Judgment by way of filing a Company Winding Up Petition. Please click here for more information.

You may enforce a Judgment by way of filing a Bankruptcy application.



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Alex Chang
Queen Mary College London LLB Hons advocate and solicitor