Bankruptcy Chinese 中文

5 Steps to Bankrupt Yourself vide a Housing Loan


Step 1: Buy a House and get a loan


A happy couple, our clients, Mr and Mrs Tan (not their real names) bought a semi detached house in Penang in 2009 for RM1,000,000, he took out a loan of RM900,000 and diligently paid the loan for 3 glorious years.


Step 2: Ignore the Summons From the Bank


After three years, the price shot up to RM1,400,000 but Mr Tan could not continue to pay the loan. A summons was filed against him.


Mr Tan thought, no matter what, the selling price would be enough to cover the loan, then with monies I paid over three years, the bank must “return” me a handsome sum.


So I WILL SAVE MYSELF SOME LEGAL FEES let the bank take judgment…


Truth to be told, the Bank DID NOT include the sum he paid for three years in the calculation… and took judgment for a much larger sum. The judgment sum came up to RM1,100,000 including interest and other charges.


Due to the fact that Mr Tan did not contest, the judgment went unchallenged.


Step 3: Ignore the Auction


Mr Tan then received notification that the Bank wanted to auction his house. Again Mr Tan thought, no matter what, the selling price would be enough to cover the loan, then with monies I paid over three years, the bank must “return” me a handsome sum.


So I WILL SAVE MYSELF SOME LEGAL FEES And estate agent commission as well for selling the house, let the bank sell it…


Truth to be told, the Bank sold it for RM1,100,000 and not RM1,400,000 but when the sums were tallied by the bank, some how in the bank’s calculation it only accounted for RM900,000Due to the fact that Mr Tan did not contest the foreclosure (auction) proceedings, the figures went unchallenged.


A house worth RM1,400,000 sold for RM1,100,000 is an everyday story. Accounting for only RM900,000 is rather strange.


Step 4: Ignore the Bankruptcy Notice


When the Bankruptcy Notice was served, Mr Tan did not check any of the figures…


The Bankruptcy Notice was for RM300,000 by now the outstanding sum ballooned to RM1,200,000 and the auction only accounted for RM900,000;


If Mr Tan had checked from the beginning, no matter how the sums were added it was IMPOSSIBLE that after the house was sold, a sum of RM300,000 is till payable…


Step 5: Made a Bankrupt for RM300,000


Again because Mr and Mrs Tan did not check the Bankruptcy Notice, a Creditors’ Petition was filed.


Note: Once a Bankruptcy Notice was issued and the Judgment Debtors, Mr & Mrs Tan, did not contest it, it will automatically proceed to the next stage which is the Creditors’ Petition.


Finally, Mr & Mrs Tan were made a Bankrupt for a sum which they did not owe and a house they never had.


Very Sad but it is true.


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