Bankruptcy

1. Can a bankrupt continue using his existing credit card?

1. Can a bankrupt continue using his existing credit card?

A bankrupt can only use his existing credit card up to the amount of RM1000.00. If the bankrupt wishes to continue using his credit card for an amount of more than RM1000.00, he must notify the issuing bank or finance company as to the status of...
2. Can a bankrupt make an application to DGI to reduce the amount of debt?

2. Can a bankrupt make an application to DGI to reduce the amount of debt?

The DGI has a duty to supervise the conduct of a debtor and to administer the debtor's estate. However, DGI has no power to reduce the amount of debt that has been filed by creditors. If a bankrupt intends to reduce the amount of debt for the...
3. Can a bankrupt make direct payment to the creditor to settle his debt?

3. Can a bankrupt make direct payment to the creditor to settle his debt?

A bankrupt is not allowed to make direct payment to the creditor and all payment has to be made through the DGI. The payment will be credited into the estate account and distributed to the creditors who have filed in Proof of Debt.
4. Can a bankrupt open a bank account or continue using his existing account?

4. Can a bankrupt open a bank account or continue using his existing account?

Once person is made a bankrupt, his existing account shall be deactivated and withdrawal of money would be debarred. A bankrupt, however, may open a bank account or continue using his existing account for reasons such as crediting his salary or any...
5. Can a bankrupt transfer his property?

5. Can a bankrupt transfer his property?

A bankrupt is not allowed to transfer his property to a third party once a Receiving and Adjudication Order has been entered against him. As soon as a person is declared bankrupt, any of his property shall be automatically vested upon the DGI.
6. Can a bankrupt travel overseas?

6. Can a bankrupt travel overseas?

A bankrupt may not travel overseas unless with the written permission from the DGI or after obtaining a court order allowing him to do so. In order to get a written permission from the DGI, a bankrupt has to make an application by stating his...
7. Can a person declare himself/herself a bankrupt if he is unable to pay his debts?

7. Can a person declare himself/herself a bankrupt if he is unable to pay his debts?

A person can make an application in court to declare himself/herself a bankrupt as allowed under section 7, Bankruptcy Act 1967. The person is required to file a petition in a High Court stating his inability to pay his debt. The procedures...
8. Can I remain as director of a company if I have been made a bankrupt?

8. Can I remain as director of a company if I have been made a bankrupt?

An undischarged bankrupt is disqualified from acting as a director of a company pursuant to the Companies Act. If a bankrupt wishes to act as a director of a company, he/she must seek the approval of the DGI or grant of leave from the Court.It is...
9. Can my parents who are bankrupts visit me in other country?

9. Can my parents who are bankrupts visit me in other country?

Travelling abroad is allowed only with the permission of the DGI who has been entrusted with the discretion by law. The primary purpose is to ensure all bankrupts give their utmost priority to payment of debts. That is the reason why social visit...
10. Can the Department of Insolvency (MdI) make a person bankrupt?

10. Can the Department of Insolvency (MdI) make a person bankrupt?

MdI does not make people bankrupt. As aforementioned, a person is made bankrupt by a court order either by an application by a creditor, or by his own application. Once a bankruptcy order is made by the court, the DGI in law will become the...
11. Do my creditors have a right to seize my properties after I have been made a bankrupt?

11. Do my creditors have a right to seize my properties after I have been made a bankrupt?

As a bankrupt, your assets vest in the DGI. Creditors can take no further legal proceedings against you to recover any debts incurred before your bankruptcy. Nevertheless, a secured creditor may seize and realize your property. The proceed of the...
12. How can a bankrupt be released from his bankruptcy status?

12. How can a bankrupt be released from his bankruptcy status?

There are three main ways as to how a bankrupt can have his bankruptcy terminated:(a) Making an application in court at any time for the bankruptcy order to be annulled on groundsie debt has been paid in full or that he ought not to be made a...
13. How can I be made a bankrupt?

13. How can I be made a bankrupt?

You can only be made a bankrupt by a court order. Nevertheless, there are two methods in which the court order may be granted i.e. either by a creditor commencing a bankruptcy proceeding against you by presenting a creditor's petition in court, or...
14. How do I conduct bankruptcy search?

14. How do I conduct bankruptcy search?

You may conduct an online search at our website www.insolvensi.gov.my under the 'Services' link. A fee of RM12.00 will be charged to your credit card. Please note that payment must be done via credit card only. Another method is via counter in our...
15. How does my bankruptcy affect my current or future employment?

15. How does my bankruptcy affect my current or future employment?

Bankruptcy does not prevent you from working. Nevertheless, a bankrupt working in other sectors should check whether there is any stipulation of such in his/her employment contract or other company documents. Please refer to 'RESTRICTIONS ON...
16. If I am Director of a company or a Partner in a firm and I’m adjudged a bankrupt, would it affect my position and role in the company or firm?

16. If I am Director of a company or a Partner in a firm and I’m adjudged a bankrupt, would it affect my position and role in the company or firm?

In such circumstances, if you wish to proceed to be in control of the management, you must seek the DGI's permission or you may obtain the court's permission. If after been declared a bankrupt and you accept an offer of such position, similar...
17. Is there a minimum amount owed for a person to be a bankrupt?

17. Is there a minimum amount owed for a person to be a bankrupt?

Yes, the creditor may file for bankruptcy action against you if the debt owing is more than RM 50,000.
18. Is there a possibility a person can be declared bankrupt without his knowledge?

18. Is there a possibility a person can be declared bankrupt without his knowledge?

Yes, a person could be made a bankrupt without him knowing it. This may be due to the legal document is sent to his old address; he does not update his address; does not reach him, doesn't read newspaper if the document is served by a substituted...
19. Is there an automatic discharge for a bankrupt?

19. Is there an automatic discharge for a bankrupt?

Automatic discharge is only subject to the prerequisites as stipulated by the Act as follows:(a) Bankruptcy notice (BN) issued only on and after 6 October 2017;(b) Has already filed and submitted the statement of affairs under section 16 of Act...
20. Once I’m declared as a bankrupt by the Court, will my other secured or unsecured creditors have the power to deal with my properties?

20. Once I’m declared as a bankrupt by the Court, will my other secured or unsecured creditors have the power to deal with my properties?

Generally, once you're declared as a bankrupt, all properties vest in the DGI. Nevertheless, a secured creditor may deal with your property under section 8(2) of the Bankruptcy Act whereby such property will be realized within 6 months from the...
21. Since I need the permission of DGI to continue my existing job or for future employment, what steps shall I take to obtain such permission?

21. Since I need the permission of DGI to continue my existing job or for future employment, what steps shall I take to obtain such permission?

You must forward a written application to the DGI through any MdI branch where your case is being administered. Please take note that together with your letter, you must attach a copy of all relevant documents to support your application such as, a...
22. Since I’m a bankrupt, what will happen to my property?

22. Since I’m a bankrupt, what will happen to my property?

All properties shall vest on the DGI except for those listed under section 48(1)(a)(ii) of the Bankruptcy Act 1967. This includes the tools of his trade and the necessary wearing apparel and bedding and other like necessaries of himself, his wife...
23. What are the disqualifications of a bankrupt?

23. What are the disqualifications of a bankrupt?

Upon the adjudication, the bankrupt is disqualified from:(a) holding the office of a Member of Parliament;(b) holding public office;(c) holding certain positions in statutory bodies, registered societies or organizations;(d) practising in certain...
24. What are the procedures to be followed by a person once he’s been adjudged a bankrupt?

24. What are the procedures to be followed by a person once he’s been adjudged a bankrupt?

Once a person has been adjudged bankrupt by the court, he must attend to MdI's branch that administers his bankruptcy case. The branch that administers a bankrupt's case usually is the one nearest to the High Court where the bankruptcy order was...
25. What are the responsibilities of a bankrupt?

25. What are the responsibilities of a bankrupt?

Upon the making of the bankruptcy order and throughout the bankruptcy period, a bankrupt must give full co-operation with the DGI in the administration of his bankruptcy and the realization of his assets. The bankrupt must provide information on...
26. What are the risks taken by financial institutions if they decide to give loan to a person who has already been made a bankrupt?

26. What are the risks taken by financial institutions if they decide to give loan to a person who has already been made a bankrupt?

If the lender is aware of the bankruptcy status of the borrower and decides to approve the loan nonetheless, the risk will be upon the lender. The lender must bear all risks in the event the borrower i.e. the bankrupt fails to service the loan.
27. What effect does bankruptcy have on the employment of a bankrupt in certain professions?

27. What effect does bankruptcy have on the employment of a bankrupt in certain professions?

A bankrupt may not engage in particular trades or professions where there may be certain restrictions imposed by professional associations or licensing authorities, such as lawyer, accountant, liquidator, quantity surveyor or act as a director of a...
28. What happens to the bankrupt’s assets or properties once he is adjudged bankrupt?

28. What happens to the bankrupt’s assets or properties once he is adjudged bankrupt?

According to Section 24 (4) of the Bankruptcy Act 1967, all of the assets and properties of the bankrupt will be vested upon the DGI.
29. What is bankruptcy?

29. What is bankruptcy?

Bankruptcy refers to a process where a debtor will be declared a bankrupt pursuant to a court order. All property belonging to the bankrupt will vest on the Director General of Insolvency (DGI) and the DGI has the responsibility to sell all such...
30. What is the difference between an annulment of a bankruptcy order and a discharge from a bankruptcy order?

30. What is the difference between an annulment of a bankruptcy order and a discharge from a bankruptcy order?

An annulment has the effect of terminating a bankruptcy order that was made against you, as if the bankruptcy order was never made.On the other hand, discharge from a bankruptcy order relieves you from all of your debts provable in the bankruptcy...
31. What should I do once I am a bankrupt?

31. What should I do once I am a bankrupt?

Once you have been adjudged a bankrupt, you are advised to come to our Branch as soon as possible. The Branch that is administering your case will be at the same state where the the bankruptcy order is/was made. You are expected to give full...
32. Whether a bankrupt is allowed to deal with his assets for instance charge his property?

32. Whether a bankrupt is allowed to deal with his assets for instance charge his property?

A bankrupt is not allowed to deal with his property as provided under Section 8 of the Insolvency Act 1967 because all of his assets and properties will be vested upon the DGI. Therefore, any transactions and dealings on his properties can only be...
33. Why are there instances where a person is unaware that he/she has been declared bankrupt by the Court?

33. Why are there instances where a person is unaware that he/she has been declared bankrupt by the Court?

There are few reasons why a bankrupt is unaware of his bankruptcy status, among others is when the service of Bankruptcy Notice and Creditor's Petition was made by way of substituted service. Substituted service is made via an advertisement in...
34. Will the status of bankrupt affect my existing job or my future opportunity to be employed as an ordinary employee?

34. Will the status of bankrupt affect my existing job or my future opportunity to be employed as an ordinary employee?

When you are declared a bankrupt, it would not deny you of your right to continue serving with your current organization. Neither would this status prevent you from any future or potential recruitment. However, you must be subjected to your terms...
35. What is the procedure for transfer of bankruptcy file?

35. What is the procedure for transfer of bankruptcy file?

The application for transfer of file must be made in writing and must be submitted to the respective branch of Malaysia Department of Insolvency (MdI) together with the supporting documents. Once the application has been received by MdI, the desk...