There are provisions in the Bankrupcy Act 1967 providing for the debtor to petition for bankruptcy against himself. These provisions are however rarely invoked. Most of the times, the bankrupt was adjudicated so by his creditor on a creditor's petition. In any event, the amount of debt must exceed RM30,000.00.

You can make yourself a bankrupt and will be 'protected' from being sued further by your creditors. However, your creditors can file proof of debt against you and will have a right to object should he apply for a discharge of bankruptcy.

All you property will vest in the Jabatan Insolvensi (previously known as Official Assignee) so you has no right to own any properties.

Once declared a bankrupt it would be an event of default which you bank can invoke to apply for an auction.

Leong Cheok Keng
Advocate & Solicitor

Dear Mr. Siang Boon Goh,

There are a few things that you need to do:-

1) To monitor the winding-up proceeding against the
company, if there is any. If the company is wound up, the situation is worse for you as it will be more difficult to solve the problem. Therefore, it is better for you to ascertain the status of the winding-up proceeding and try to prevent the company from being wound-up. You may have to see a lawyer for better assistance and advice.

2) It is good that you saw the bank officer to discuss about re-financing. However, sometimes, you alone may not be able to convince or push the bank for a settlement arrangement. Apart from seeing that particular officer, I suggest that you try every effort to see a higher ranking officer in the bank such as branch manager or officer with higher ranks for negotiation. During the negotiation, try to ask experienced person or persons to follow and support you. Of course, you need to have the proof of the company's financial ability with you. Once again, assistance of a lawyer is needed if necessary.

3) If there is any inappropriate action done by that particular bank or officers in that bank in handling the situation, you may lodge complaint with Bank Negara. Again, you may need assistance from a lawyer if it is necessary.

I hope the above may assist you.

Thank you. All the best.

Goh Chuan Chean
Advocate & Solicitor

Dear Nurul,

Normally when a property has been auctioned off successfully, the previous owner need to pay the financier/bank the balance of the purchase price after deducting the price of the property which has been auctioned (correct me if I'm wrong pls).

In your case, the only thing you can do is to negotiate to settle the balance amount (which you said should be around RM24,000). Failure of making the payment will lead the Bank to initiate further legal action against you.

However, you may ask the Bank to give you an itemised calculation of the payment need to be paid. If there is already an action against you, you have to contact the lawyer appointed by the Bank to negotiate settlement.

Liza
Advocate & Solicitor

Dear Christine,

If you wish to make any arrangement to settle your outstanding debts, you can actually seek advise from the Credit Counselling and Debt Management Agency which was set up by Bank Negara Malaysia to provide assistance in managing your finances and debts. Their website is www.akpk.org.my or you may call their toll free number 1-800-88-2575.

Usually, when there is any action against you by the bank, the bank will normally send their demands or notices to you at your last known address. If you have not receive such letters or notices but is still concern then you may conduct a bankruptcy search at www.myeg.com.my.

Under the Bankruptcy Laws in Malaysia, any person who has been adjudge a bankrupt is prohibited from leaving the country i.e they have to surrender their passports to the relevant authority. However there are instances whereby a person can get special permission to leave the country from the relevant authority i.e immigration department, bankruptcy department etc. All assets of a bankrupt person will be frozen.

Normally, when a person is already a bankruptcy, he or she may face difficulties at some countries, but this also depends on the rules and regulations of each country.

If you have complaints against any banks in Malaysia, you may do so by contacting and writing to Bank Negara Malaysia.

Liza
Advocate & Solicitor

Dear Robert,

First of all, you may apply to Court for bankruptcy through your solicitors, and your solicitors may charge a fee to commence such work.

As for a writ of seizure of Sale, kindly note that your creditor(s) would not be able to apply for a writ of seizure and sale unless they have first successfully entered a judgment against you in the civil court(s). Once they obtained the sealed judgment from Court(s), they may then apply to commence for an order of writ of seizure and sale against you. The procedure normally takes about months.

Once you are adjudicated a bankrupt by the Court, the following consequences ensue:-

a) you shall not leave Malaysia without permission from the Director General Office of Insolvency ("the Office") or of the court, i.e. your passport will be kept under the Office's custody;

b) you cannot without permission from the Office or the Court carry on / enter into any business either alone or in partnership or become director of a company or otherwise either directly or indirectly take part in the management of any company;

c) you cannot without permission from the Office or the Court control any business on behalf of your spouse, or siblings of your own or of your spouse;

d) you cannot maintain any court action against another party save and except for action for damages in respect of injury to yourself; and

e) you shall once in every 6 months render to the Office an account of all monies and property coming to your hands for your own use during the preceeding 6 months, and shall thereafter pay and make over the same monies or properties to the Office save and except that which is needed for yourself or your family.

Wallace Wong Hur Shiaw
Advocate & Solicitor

1) Yes. The court can grant bankruptcy against a person even though that person cannot be found. So long as, all cause papers in the bankruptcy proceedings have been properly served (i.e substituted service namely by advertisement and service of the cause papers to your last known address).

2) No. It is better to meet the official assignee (OA). The reason for which would be highlighted in 3(a),(b) & (c) below. In addition, the OA would give some options for settlement. If you attend all meetings and pay all monthly payments you may apply for discharge as a bankruptcy, the official assignee would prepare a report outlining your track records for the past 5 years. A good report would help you in your application for discharge.

3) (a) & (b)
First, the official assignee would asses your means - your financial capabilities and commitments (liabilities).

Second, the official assignee would call you up to attend creditor meetings from time to time. During the meeting, judgment creditor(s) would ask you whether you intend to settle and how you are going to settle.

Then, the official assignee would suggest a monthly repayment (say RM200 or RM500 per month).

(c). Yes. Once you have been declared a bankrupt the official assignee would notify all banks of your status and upon which your banking accounts would be frozen with immediate effect. All monies in the accounts would then be chaneled to the official assignee for settlement purposes.

(d). A discharge can be by several means:-

i). full settlement - you may ask the judgment creditor to reduce the settlement amount (say by 5%).

ii). 5 years after being declared a bankrupt. However, a good track record (as I mentioned earlier) is required.

(e). It depends. You don't need to engage a lawyer if you know how to go about it (some information would be obtained from OA)

Joseph Lee
Advocate & Solicitor

The judgment debt owed by the judgment debtor, unless set aside, remains a debt to which the debtor is required to pay.

The Bankruptcy Act allows the judgment creditor of a deceased debtor to present to the court a bankruptcy petition, asking from the Court for an order for the administration of the estate of the deceased debtor according to the law of bankruptcy.

The petition for administration however cannot be presented by the judgment creditor in general when proceedings have been commenced for the administration of the deceased's debtor's estate by other party. In your case, the fact that the letter of administration has been applied for may mean that the Bank (I assume the judgment creditor) may seem to be unable to petition for the aforesaid order of administration.

However, if the Bank can show to the court that the estate is "insufficient to pay its debt" [according to section 122(6) of the Bankruptcy Act 1967], it still can proceed to obtain the order of administration of the estate of the deceased debtor in bankrupty, and like consequences shall ensue as under an administration order made on the petition of a creditor.

Upon the order of administration being made, the property of the debtor shall vest in the Official Assignee as trustee to said property, and he shall immediately proceed to realize and distribute the property according to the Bankruptcy Act.

Perhaps the best foot forward at this juncture is to allow the legal representative of the deceased debtor's estate to negotiate with the bank as to mode of settlement, or to discuss with the legal representative whether the bank can prove insufficient estate to pay the deceased debtor's debt before taking the next course of action.

Wallace Wong Hur Shiaw
Advocate & Solicitor

Dear Adrian,
If a softer approach is intended, then I suggest you talk to the bank's solicitors, proposing settlement of debt to be paid within the period you think you are comfortable with. Generally banks will be more inclined towards that route instead of making you a bankrupt so as to ensure a win-win situation. The bankruptcy Notice being advertised will record the details of the Bank's solicitors, including their names, address and phone number. Please quote the solicitors firm's reference number so that they could transfer your line to the relevant solicitor in charge without delay.

In the meantime you could always choose to dispute the bankruptcy proceeding against you. The amount is the sum you owed the bank minus the proceeds from the auction they conducted. But note that the bank is still entitled to charge interest on the remaining outstanding sums accrued, which you still have to absorb as days come to pass.

To dispute the bankruptcy proceeding, you need to engage a solicitor of West Malaysia to assist you in the proceeding. Once a solicitor is appointed, the solicitor will either contact the bank's solicitors to obtain the relevant documents (addressed as "cause papers") to know what is the exact amount owing and what is the status of the proceeding, or to conduct a file search themselves in the Bankruptcy court registry, where they could photocopy all the relevant cause papers from the court for the same objectives. Normally the former method is cheaper and faster, because in most circumstances your solicitor needs about a week to conduct a file search from court after payment of prescribe search fees and photocopying charges, whereas the same could be done within a few days if your solicitors were to liaise with the Bank's solicitors directly.

By the way even if you are disputing the bankruptcy proceeding, there is nothing to stop you to negotiate for a settlement in the meantime.

If you were adjudicated a bankrupt, some of the consequences of bankruptcy are as follows:-

a) you shall not leave Malaysia without permission from the Director General Office of Insolvency ("the Office") or of the court, i.e. your passport will be kept under the Office's custody;

b) you cannot without permission from the Office or the Court carry on / enter into any business either alone or in partnership or become director of a company or otherwise either directly or indirectly take part in the management of any company;

c) you cannot without permission from the Office or the Court control any business on behalf of your spouse, or siblings of your own or of your spouse;

d) cannot maintain any court action against another party save and except for action for damages in respect of injury to yourself; and

e) you shall once in every 6 months render to the Office an account of all monies and property coming to your hands for your own use during the preceeding 6 months, and shall thereafter pay and make over the same monies or properties to the Office save and except that which is needed for yourself or your family.

As you can tell, the civil consequences of bankrupt status is grave. All properties of yours will be vested in the hands of the Office from the date you are adjudicated a bankrupt until you pay off the debts accepted by the Office, and the Office may deal with the said properties any way they deem fit to offset your outstanding debt. Be it as it may, you need to instruct your solicitors to look at the Bankruptcy Notice to determine whether the Notice is defective. You have mentioned that you have not received correspondences from the bank. That may be because you have moved out from the last correspondence address according to the Bank's record? If such is the case, my next question would be whether you have informed the Bank of your change of address. Generally if the Bankruptcy Notice was served wrongly to your address despite your notice of change, your solicitor may be able to set aside the bankruptcy notice. Other than that the Bankruptcy Notice remains effective and good.

By setting aside the Bankruptcy Proceeding, the Bankruptcy Notice will be struck off and you shall have at least a moment of breather. However this is merely presumptuous without detail examination of the cause papers, and note that you still are absorbing the interest charges incurred by you, and that the Bank is still entitled to recommence the bankruptcy proceeding against you based on your latest address.

Having said that there are in fact many other ways to set aside the bankruptcy proceeding against you, a matter which will be discussed in details once your solicitor is appointed. A solicitors' fee differs according to the extent of work and complicity of the bankruptcy proceeding, and to each solicitor's experience and seniority. This is a matter of which you may need to take some time to look around for.

Please note that as details are not fully sufficient from the your e-mail, the answer provided is merely general in nature and should not be taken as legal advice to be relied upon by you or any one reading it.

Wallace Wong Hur Shiaw
Advocate & Solicitor