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Bankruptcy Law Q&A
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 Area of Law: Bankruptcy Law
K G Low from Kuala Lumpur

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 Area of Law: Bankruptcy Law
Dear eLawyer,

I was told by a bank that my account is under bankruptcy proceding status and hence all accounts have been frozen. I went and checked that it is due to the company that my name appears as one of the directors of the company(my father used my name to form a company for loan last few years back).

This company had a loan with a bank for a shoplot and due to the financial problem, not able to pay the instalment since few years agos (total loan from RM100K+ became RM235K+ now)and as I knew my father had approached Bank Negara for requesting the bank for rearrangement for the re-payment last year some how only able to pay for the first 4 months and outstanding for 4 months hence the bank sue the company for bankruptcy.

I had tried to approach the Bank immediately and negotiate with the person in-charge of the case, I told her to release the company bankruptcy proceeding and to release the company assets hence I can refinance with other bank with another assets and settle the loan with them in few instalments(monthly repayment is RM1800).

She told me that, to show my sincerity, I should pay partial of the outstanding re-payment hence they only able to do something. The outstanding payment is about RM7K and I paid them RM5K and requested to bring forward the outstanding balance to the following months and will continue to pay RM800 until I get the refinance loan approved, will use the money to do the full settlement.

Somehow after a week, I went back to talk to the person in charge, she told me that she thought that I was talking about my personal account frozen problem and seem not willing to release the company assets. I'm stuck now since the company assets is frozen and not able to refinance, I had approached a bank for refinance, based on the rental, it should more than enough to cover the re-payment if refinance, somehow they checked and found the said property has been frozen and there is nothing they can do and the marketing executive told me I need the clearance letter from the bank then they only able to try to refinance for me.

I had no idea how can I solve the problem, I try to go Bank Negara (LINK) to check my status and Insolvency Department there, the company and I was not in the system record. How can I get the bank to defreeze the company asset or which department I can approach? I have confidence of source income to prove that I am able to pay for the re-payment if refinanced. The rental income is about RM6k and the re-payment after refinance is less than RM4K. I am not able to pay for the current re-payment is because it is too high about 10% interest... Please help!
Siang Boon Goh from Kuala Lumpur

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 Area of Law: Bankruptcy Law
Nurul Zakaria from Kuala Lumpur

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 Area of Law: Bankruptcy Law
Dear eLawyer,


My shop office building in KL has negative equity over a very long term (i.e. loan much more than value)- unable to get tenant/s due to that area for a long time.

I cannot maintain payments and payments have now stopped for 5 months (I discussed on phone and advised the bank officer in charge). He suggested I should sell my building.

After that call, I have tried to communicate with the bank for the promised redemption sum and reduction of interest but no response.

I have obtained 2 buyers at two occasions and advised the bank (total 6 faxed letters sent between March and June) but still no response (the property has increased a little in value and there is some increased interest in the area)

I have tried to see if some form of arrangement can be made outside of the proceeds of the sale but still no response.

The total loan has a significant increase for penalty and other interest which has made the situation worse.

I am concerned that the bank may have already applied for court judgement / bankruptcy however I have received no letters or notice of default is this normal (can they do this without notifying me) what is the normal procedure for the bank to take action against their defaulters who tried to arrange for settlement?

If they have done so can I find out from somewhere is a court application has been made and if so where?

If an application is made can I write to someone e.g. administrator or lawyer other than the bank to try to negotiate a way out or is it so black and white?

Is it time to appoint a lawyer now?

If I am made bankrupt is there scope to negotiate a deal to get out if it earlier other than paying the full some due?

If I am made bankrupt does this mean that I will not be able to leave Malaysia if I return for 10 years. My husband is British and our life is overseas. Is there dispensation and if so how difficult is it to get it?

My husband has an opportunity to work in Singapore will bankruptcy in Malaysia mean that I will have problems in Singapore if I go there?

My husband is also a co-borrower for the loan on the shophouse but his name is not on the lease. Will the bank pursue bankruptcy for both of us in UK as well?

I have a house in KL also under a loan (different bank) but with some equity how will Bank go for this property?

I have some family loans (brother and sister). Is it possible to get money from the sale of the house to pay them back before the bank tries to get it? Will they get any consideration in my bankruptcy?

Is there any facility in Malaysia to reach an individual voluntary arrangement (IVA) as in other countries to pay back the debt(s) in an agreed manner?

Is there an official organisation that acts against the banks to ensure that they act properly and if so where can I find it?

Your advice would be greatly appreciated.

Thank you and regards.
Christine from Outside Malaysia

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 Area of Law: Bankruptcy Law
Dear eLawyer,

I am now not able to pay back my huge debts even after seeking advice from AKPK, a debt counselling agency of Bank Negara. My credit cards & personal loan debts (unsecured) are owing to about 10 banks. I am left with no choice. Therefore, I am desperate to seek your advisory help.

I understand that the Insolvency Dept is located in Putrajaya. How can I apply for individual bankruptcy? In the meanwhile, how fast do I receive a writ of seizure(if any) of my belongings at home?

If successfully applied for the individual bankruptcy, what are the things deprived from me? Am I able to own a car if that car is meant for me to earn a basic living? Do I need to pay any charge or cost for the application? Any monthly payment upon bankruptcy? Is it true that after 5 years of bankruptcy, I can apply for a discharge?

I sincerely hope your panel lawyers can advise me as soonest possible.

Thank you.
Robert Wong from Kuala Lumpur

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 Area of Law: Bankruptcy Law
In year 1998 when I was 23yrs old still schooling with no financial background, two of my uncles from Taiwan and South Africa used my name as a borrower and they acted as guarantors to get the loan from the bank to purchase 2 units of shop houses for investment purposes in Johor Bahru.

In year 2003, two of my uncles did not manage to sell these 2 units of shop houses and did not settle the outstanding payments with the bank. I was being declared bankruptcy by the court. The bank has advertised on the newspaper to look for me, but I was no where to be found as I did not read newspaper and I live in KL.

In year 2004, these 2 units of shop houses has been auction. The outstanding payments has not settle is RM 320,000.00 after deducted the auction price.

In year 2007, I was being blocked by the immigration to leave Malaysia.

All these years, 2 of my uncles are on the run in other countries and left me in Malaysia and they do not want to help me out of this case. I have no other option, but to face it alone.

I have not go to Insolvency department to have any meeting or settle this matter.

Please help me out in this matter, and advice me in the following:

1) Is it right for the Court to declare someone bankruptcy when the person cannot be found?

2) It has been 4 years since the day I am bankrupt. Can I avoid to meet Insolvency department and wait for the discharge?

3) If I am going to Insolvency department,
(a) what are the process?
(b) what will they ask me to do to settle / clear the outstanding payment?
(c) will my saving account being freeze?
(d) how can I be discharge from bankruptcy?
(e) do I need a lawyer / solicitor?
Jay J from Kuala Lumpur

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 Area of Law: Bankruptcy Law
Iznina Rafa from Kuala Lumpur

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 Area of Law: Bankruptcy Law
Dear eLawyer,

A bankruptcy summons was advertised on 4th Oct in the Star with a hearing date scheduled for 14th Feb 2008. This is related to an apartment purchase several years bank for which the bank as re-possessed the apartment and auctioned it off. I have not received or been receiving any correspondence from the bank and in fact I don't even know how much they are claiming for.

In your experience, what should be done about this situation ? What
steps can I take ? What kind of fees am I looking at to engage a lawyer to communicate on my behalf with the bank's lawyers and find a resolution other than bankruptcy.

Right now I am residing overseas. I assume that the worse case scenario is that I am declared a bankrupt. If this happens what are the possible implications and how long does bankruptcy last ?

Adrian From Kedah

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