Whatever the reason is, bankruptcies should be avoided at all costs as it limits all future financial opportunities. Here are some of the most frequently as questions about bankruptcies and their answers:
.jpg)
What is bankruptcy?
Bankruptcy happens when and individual or an institution, like a company, is unable to pay off its debt. In Malaysia, this debt has to remain unpaid for a minimum of 6 months and the debt amount has to be RM 30,000 and above. Additionally, the debtor has to have resided in Malaysia for at least the past one year and the amount owed has to be ascertainable and liquidated.
When this happens, the debtor then files for bankruptcy to the courts. When the bankruptcy status is given to an individual, all his or her assets are surrendered to be sold off for settling all debts.
What are the benefits of declaring bankruptcy?
The debtor usually files for bankruptcy to protect himself or herself from legal action by their creditors (the people who lent them money). Alternatively, creditors can also serve a bankruptcy notice to the debtor as a way to recover their money.
How does someone become bankrupt?
The most common ways someone can end up bankrupt is for them to be unable to pay a loan, including personal loans, car loans or housing loans. Additionally, one can become bankrupt if they fail to settle credit card debt, or are suddenly beset with another person’s debt as a result of being a guarantor.
What happens after the courts declare you bankrupt?
The first thing that will happen is that a Director General of Insolvency (DGI) will be appointed to oversee the case. There will be many restrictions on the debtor after this, including:
• Being unable to travel overseas as the DGI will hold onto the debtor’s passport
• Unable to start a bank account without the DGI’s approval
• Unable to become a company director, or be in management, or start a company
• All belongings and assets have to be surrendered to the DGI
• A portion of the debtor’s monthly income will be deducted and used to settle his/her debts
How can you be released from bankruptcy?
There are two ways you can escape from bankruptcy. Firstly, by settling all your debts and secondly, when the debtors and creditors come to an agreement about a repayment scheme. In either cases the DGI can issue a certificate of discharge or apply to the courts to proclaim on order of discharge for the debtor.
In certain unique cases, the DGI is allowed to issue a certificate of release 5 years after bankruptcy has been declared, even though there are still debts. However, this is subject to strict conditions like the debtor’s behaviour, current financial status and others.
Bankruptcy happens when and individual or an institution, like a company, is unable to pay off its debt. In Malaysia, this debt has to remain unpaid for a minimum of 6 months and the debt amount has to be RM 30,000 and above. Additionally, the debtor has to have resided in Malaysia for at least the past one year and the amount owed has to be ascertainable and liquidated.
When this happens, the debtor then files for bankruptcy to the courts. When the bankruptcy status is given to an individual, all his or her assets are surrendered to be sold off for settling all debts.
What are the benefits of declaring bankruptcy?
The debtor usually files for bankruptcy to protect himself or herself from legal action by their creditors (the people who lent them money). Alternatively, creditors can also serve a bankruptcy notice to the debtor as a way to recover their money.
How does someone become bankrupt?
The most common ways someone can end up bankrupt is for them to be unable to pay a loan, including personal loans, car loans or housing loans. Additionally, one can become bankrupt if they fail to settle credit card debt, or are suddenly beset with another person’s debt as a result of being a guarantor.
What happens after the courts declare you bankrupt?
The first thing that will happen is that a Director General of Insolvency (DGI) will be appointed to oversee the case. There will be many restrictions on the debtor after this, including:
• Being unable to travel overseas as the DGI will hold onto the debtor’s passport
• Unable to start a bank account without the DGI’s approval
• Unable to become a company director, or be in management, or start a company
• All belongings and assets have to be surrendered to the DGI
• A portion of the debtor’s monthly income will be deducted and used to settle his/her debts
How can you be released from bankruptcy?
There are two ways you can escape from bankruptcy. Firstly, by settling all your debts and secondly, when the debtors and creditors come to an agreement about a repayment scheme. In either cases the DGI can issue a certificate of discharge or apply to the courts to proclaim on order of discharge for the debtor.
In certain unique cases, the DGI is allowed to issue a certificate of release 5 years after bankruptcy has been declared, even though there are still debts. However, this is subject to strict conditions like the debtor’s behaviour, current financial status and others.
