Bankruptcy effect on children's education

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asked on Jun 25, 2009 at 21:48
by   dragonfly
My husband owed credits card debt to the amount of RM700K. His business failed miserably late last year, and had not been repaying the monthly payments for 6 months now. He even used my name to borrow , and now I owed the banks about RM100K , the larger amount is RM40K personal loan , and a credit card RM28K. In the event the banks intend to proceed with the bankruptcy, how long will it take before it will take effect, and we can no longer stay in our house anymore with the WSS issued from the court. Our house still owed the bank, and the last time we checked, the outstanding amount is way beyond the market value. Will they foreclose the house in this case? The instalments on the house is very updated, no missed instalments.

Secondly, will the bankruptcy status affect my children's application for scholarhips, locally and abroad? Government or private?

Please advise. In need of really good advice...
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answered on Jun 26, 2009 at 15:24
by   BlurSiow
the Bank's main priority is always to recover the monies due to it, therefore its very likely your house will be sold by way of auction to the public to obtain the best price possible.

but at any time before the hammer falls, the house still "technically" belongs to you. That is you pay off the bank prior to an auction.

the proceeds from the house, the bank can only claim for the portion which is due to it..

finally doubtful if it will have any effect on your children. Bankruptcy is not a curse, it doesnt extend to your entire generation.
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answered on Jun 27, 2009 at 01:15
by   dragonfly
Thanks BlurSiow for your advice.

I have done alot of checking on the issue pertaining to my children, but I was unable to find anything in Malaysia websites. But I managed to find an article in the US websites which states " Anti-discriminatory law " whereby they do offer scholarships to offsprings of bankrupts, as long as the parents do not co-sign the agreement. Further, the application of scholarship is based entirely on the students and only bind the students, not the parents. Does this law applied here in Malaysia too?
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answered on Jul 5, 2009 at 19:19
by   notalawyer
Dear DragonFly,

The 1st thing to always remind yourself is not to blame your husband, b'cos he tried his best.
Only when you can do this will both of you be able to sit down together and plan this battle with the banks.

There is no reason why you cannot continue to stay at your house even with WSS.
The credit card banks cannot take the house easily, b'cos the mortgage bank won't let them touch it.
They can only take items in the house like TV, paintings, fully paid up cars etc.  Let them take.
Move your big TV to a relative's house and get a small TV.

The best way to avoid bankruptcy is meet them in court for every mention and hearing.
If you cannot afford a lawyer, you can represent yourself.
Go to MPH and buy the Subordinate Court Rules book and read carefully.

You will be surprised how many banks give up when you put up a good fight.
Bankruptcy or Blacklisting will not affect your children's chances of any scholarships.
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answered on Jul 8, 2009 at 03:32
by   dragonfly
Hi Notalawyer,

Your reply has been much enlightening.

The house we are living in is mortgaged to the bank which I have a credit card with. Well, in the event I too am served with bankruptcy, then the bank itself can foreclose the house , right? There goes the house!

I was thinking of approaching AKPK since my debt is not that large. If I am approved under their program of restructuring, the banks cannot sue me, is that right? Please advise. Because if that is true, I can get to keep the house, even if it is under joint name with my husband. Just hoping.

My husband just received his first summons for personal loan default. Heard it comes faster than credit cards. It is to be mentioned in KL early September. Well as you have said, if he attends all the mentions and hearing, it would help prolong the serve, right. So then if he were to attend, can he request the case be transferred to our home state and indirectly prolonging it further...? Heard it takes 5-6 months for case transfer! During this duration, is his name already blacklisted and unable to travel overseas? Or is it after the 'finale'?

How long approximately from day of first summons to official bankruptcy 1) with full attendance of hearing and mentions  2) without attending even one hearing or mention?

The book you mentioned, I will sure check it out.

Please reply...
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answered on Jul 8, 2009 at 11:53
by   notalawyer
Dear DragonFly,

Even if you have a credit card with the house mortgage bank, very unlikely the bank will auction the house if you pay the mortgage promptly, even if you don't pay the credit card.  This is because by auctioning your house, ( which most likely will get a low price ) the bank will find itself in a bigger hole.

Normally AKPK will suspend bank's legal action but some banks have been known to continue with legal action even with prompt AKPK payment to get some advantage over the clients.

After a while, you may find that you have many lawsuits on your hands.
Try to attend all, but concentrate on the ones bigger than RM 30k because that is the one that can make you bankrupt.
When more debt collectors call to ask for payment, tell them that you already have plenty of lawsuits pending and may be bankrupt soon.
This will actually discourage some banks some suing you.

He can continue to travel until he loses a bankruptcy proceeding.
Bankruptcy proceedings can only come after he loses a big case. ( > 30K ).

So concentrate on not loosing any case.
If a case is called in the High Court, read the Rules of the High Court book.
If a case is called in the Sessions or Magistrates Court, read the Subordinate Court Rules book.

Buy both the English and Malay versions for easier understanding.

On the first mention of the case in September, tell your husband to ask for 2-3 months to find a lawyer. ( even though he don't really want to find a lawyer).  This will buy some time.

Before the second mention, file in a Notice of Appearance to say the he will "appear in person".
Also before the second mention, file in an Application for Transfer to another court.  ( this must be done in writing, read the book. )
The plaintiffs (bank) may oppose the transfer request.

Pay attention to the deadline to file the Defence which will be decided by the judge.

Good Luck.
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answered on Jul 8, 2009 at 13:45
by   notalawyer
Please see new thread.
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answered on Jul 9, 2009 at 00:24
by   dragonfly
Dear Notalawyer,

That was really helpful. Read the new thread and have somehow got the idea how it it operates.
It sound like a tedious prospect, but guess we still got to deal with it. If along the way, we screwed up some deadlines, would the case be over and considered lost? That means if we have to devote most of our time to court proceedings to bear the fruits of victory, if lucky. Anyway, thank you so much for the thorough info.It means a lot and is much, much,much appreciated.

For someone with a nick 'notalawyer', you are definitely a professional.

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answered on Jul 9, 2009 at 02:01
by   notalawyer
Yes. You definitely need to put time and effort on it.
Don't wait for last minute.  Every case is different. There is always a chance to win.
If you miss the deadline to file the defence, the plaintiff can request the judge to "enter judgment." ( meaning you have lost the case).
Sometimes by begging, the judge may allow you more time, but you don't want to take that risk. 

I am really not a lawyer.  I was like your husband in a way.
My business slowed down and the bank auctioned off my land for half the price.
After that they figured I still owe them 200k.
I couldn't afford lawyers so I fought them myself.
If I could afford lawyers I wouldn't have missed the installments, right? Stupid System.
Anyway, I made a promise by my father's grave that if I win the case, I would help others oppressed by predatory banks.
I got lucky and got the case dismissed.

So here I am.
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answered on Jul 9, 2009 at 13:40
by   notalawyer
If this forums is down, you can look for me at         or
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answered on Jul 10, 2009 at 04:24
by   Mohan
Hi Notalawyer,

Your words below nearly moved me to tears. No joke sincerely speaking.

" Anyway, I made a promise by my father's grave that if I win the case, I would help others oppressed by predatory banks. I got lucky and got the case dismissed. So here I am." ..... by Notalawyer.

I'm touched by your promise at your father's grave and I strongly believe your father in the spirit world is proud of you as a son of filial piety. And his spirit/heart is around to care and help you as you help others. Cheers!

Keep up your GREAT HELP for the oppressed !!!
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