Bankrupt
Bankruptcy will
be declared to an individual that:
–
Has debt of more than RM 50,000
and cannot afford to pay it
–
Failed to pay debts for 6
consecutive months
–
Residing in Malaysia for more
than 1 year during the indebted period
For a RM 10, you
may verify your bankruptcy status at the Insolvency Malaysa headquarters in
Putrajaya.
The insolvency
process will be initiated for individuals who meet the circumstances and an
order from Court will be issued. There are two methods an individual can be
classified as bankrupt, namely through:
–
Creditor’s petition: petition
submitted by a creditor against a debtor who has debts more than Rm 50,000
–
Debtor’s petition: an
individual voluntarily declares himself bankrupt to protect themselves from creditors
that they are unable to pay the debts.
Petitions that
have been submitted are not allowed to be withdrawn without the permission of
the Court.
Consequences of Bankruptcy on Company’s Directors
Under Section 38 (d) of the Insolvency Act 1967, a bankrupt without
the permission of Director General of Insolvency (DGI) or the Court is not
allowed to enter in or carry on business either alone or in partnership.
Bankrupt also should not become a director of any company or otherwise directly
or indirectly take part in the management of the company.
However, bankrupts can retain their position as a director of the
company before disqualified by making an application to the DGI or the Court.
In addition, bankrupt is prohibited from working in the companies owned by
their spouses, children or relative and from running a sole proprietorship
business.
Approaches to be released from bankruptcy status
1)
Revocation Order under Section
105 of the Insolvency Act 1967
A revocation order will be issued if the Court is satisfied with the
revocation application. An application can be made when all of the debt claims
are paid in full by the individual along with the fees and the cost of
administration related to the case.
2)
Relief by the Court Order under
Section 33 of the Insolvency Act 1967
A bankrupt can apply for a release of bankruptcy status from the
Court. The court will examine the attitude and conduct of the applicant through
the report of DGI to decide whether the applicant receive an absolute relief,
conditional relief or the application is rejected.
3)
Relief with certificate of DGI
under Section 33A of Insolvency act 1967
Application for a certificate of discharge can be submitted when the
period of 5 years has expired from the date of bankruptcy issuance. The release
of the certificate is subjected to the grounds of the application, the
percentage of dividend payable, cooperation and attitude of the bankrupt throughout
the administration of the case and the interests of the creditors,
DGI can release a bankrupt without nay objection when:
–
Bankrupt for reasons as social
guarantor
–
Bankrupt is registered as a
Person with Disabilities (OKU) under the Person with disabilities Act 2008
–
Bankrupt has died
–
Bankrupt has suffered from a
serious illness that have been confirmed by a Government Medical Officer
4)
Automatic relief under Section
33 C of the Insolvency Act 1967
A bankrupt can apply for release from bankruptcy within 3 years of filing a Statement of Affairs with conditions applied.
Reference link
Insolvency Act 1967
http://www.mdi.gov.my/index.php/ms/perundangan/undang-undang/1328-akta-360-akta-insolvensi-1967
https://www.ceritahutangbankdananda.com/2016/09/perkongsian-seorang-bankrap/