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Bankruptcy - Debt of RM800k vs Salary of RM5k

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asked on Jan 11, 2019 at 18:34
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edited on Jan 15, 2019 at 16:26
 
I defaulted a scholarship overseas. Didn't meet CGPA by 0.03. My sponsor paid RM700k, but the contract says if any breach occurs, I am to re-pay RM800k in one lump sum. I have worked 7 years and have a salary of only RM5k and I do odd jobs for supplementary income. I've appealed and requested scheduled payment to my sponsor but they insist on getting a court decision. No discounts or scheduled payments.

Last month the court decided I should pay back in full plus legal fees, in one lump sum.

My questions are below:

If I am declared bankrupt:
1. Can anybody explain what I would likely go through if I surrender to Jabatan Insolvensi Malaysia (JIM)?

2. I've seen 10% gross salary deduction in the comments here, but given the huge amount for my debt, would I be made to pay more than 10%?

3. How does salary deduction work? If i.e. I get 10% gross deducted but I get a raise to RM6k, will it automatically go up to RM600?

4. How long will bankruptcy last? Assuming a best-case scenario where I do everything JIM asks me to.

5. I have a car on hire-purchase with RM30k left. What will happen as the car is still under Hire Purchase (HP) with Maybank.

6. I have two guarantors. If I am made bankrupt and pay whatever JIM makes me every month, will my guarantors have to pay as well?

7. Any other advice? Agensi Kaunseling dan Pengurusan Kredit (AKPK) or other sources of help?
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answered on Jan 11, 2019 at 19:07
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Last month the court decided I should pay back in full plus legal fees, in one lump sum.
 
What stage was it in your bankruptcy proceeding when you attended the court, was it the Creditor Petition stage?
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answered on Jan 11, 2019 at 20:24
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@kiki

What stage was it in your bankruptcy proceeding when you attended the court, was it the Creditor Petition stage?
I've not been made bankrupt yet. They have sued me and they won summary judgement last month. If/when they decide to make me pay, I will immediately be at a default and therefore they can begin bankruptcy proceedings.
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answered on Jan 11, 2019 at 22:23
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edited Jan 15, 2019 at 16:37
 
@Pelanty

Brief answers to your questions (non-legal):

1.  You have been reading under this section already. You should have already known what is the next course of action. Is your Judgement Creditor a Bank or Others?

2.  The 10% is normally applied to those who are working overseas. For local bankrupts it actually depends on the 6 monthly submissions of the Income & Expenditure (I&E) Statement as required by the Insolvency Act 2017. It can be slightly higher or lower. Are you married with children?

3.  Same as above in (2) above that is why the need for 6 monthly declarations via supporting documents.

4.  After 3 years of Case Management with Jabatan Insolvensi Malaysia (JIM) upon reporting in, a bankrupt can apply for a discharge from bankruptcy. It all depends on other terms and conditions imposed. If one has paid by instalments exceeded 50% of the Proof of Debts, a bankrupt can apply for early discharge via High Court (Terms and conditions applies).

5.  It all depend on the current policies of MBB. It also depends on the Market Value vs Balance of Loan. There is a good chance that you may retain usage of the car with the permission of JIM and can continue with the HP instalments.

6.  Yes, they can be brought to court but cannot be made bankrupted under the new Insolvency Act as a Social Guarantor. Other modes of debt recoveries remain the same as a Judgement Debtor.

7.  APKP may not be able to help as the amount is too high. AKPK only help on Bank Debts.
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answered on Jan 12, 2019 at 00:56
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 They have sued me and they won summary judgement last month. 
You really thought you have no defence and not file anything against their Writ summon?

Didn't meet CGPA by 0.03. 
What was the CGPA marks you supposed to achieved and not breaching the contract?
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answered on Jan 15, 2019 at 15:29
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@kiki

You really thought you have no defence and not file anything against their Writ summon? 
I did file a defence. Bank Negara sued me. They also filed for summary judgement and the judge decided that based on all info given (incl my defence) they ruled in favour of BNM and in favour of summary judgement.

What was the CGPA marks you supposed to achieved and not breaching the contract?
CGPA 3.50 but I graduated with CGPA 3.47
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answered on Jan 15, 2019 at 15:47
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edited Jan 15, 2019 at 21:25
 
@carrie1226

1.  You have been reading under this section already. You should have already known what is the next course of action. Is your Judgement Creditor a Bank or Others?
I've only read some, not all. And many comments are about cases under the previous Act. Already I have conflicting info telling me I can qualify for auto discharge and some telling me I must apply. I've sought help from various law firm hotlines, but 2 responded with fees, one I'm still waiting on an answer and the other didn't bother. Hence why I check here for help, even if it's just to point me in the right direction.
My Judgement Creditor is Bank Negara Malaysia. A bank...but not quite a bank. They also 'own' AKPK (the head of AKPK is a secondee from BNM). So I don't know if AKPK can handle BNM cases.

2.  The 10% is normally applied to those who are working overseas. For local bankrupts it actually depends on the 6 monthly submissions of the Income & Expenditure (I&E) Statement as required by the Insolvency Act 2017. It can be slightly higher or lower. Are you married with children?
Unmarried, no kids. How much higher is slightly higher? Up to 20%?

3.  Same as above in (2) above that is why the need for 6 monthly declarations via supporting documents.
Thanks. I suspected so but just wanted confirmation.

4.  After 3 years of Case Management with Jabatan Insolvensi Malaysia (JIM) upon reporting in, a bankrupt can apply for a discharge from bankruptcy. It all depends on other terms and conditions imposed. If one has paid by instalments exceeded 50% of the Proof of Debts, a bankrupt can apply for early discharge via High Court (Terms and conditions applies).
a) Sorry, what exactly is Case Management with JIM? Is that what people mean by surrendering to JIM and letting them restructure the debt and deduct salary?
b) I read on the JIM website that if a bankrupt pays the Target Contribution without issue for a period of time they will allow auto discharge. How is the Terms and Conditions figure usually set? Is it a percentage?

5.  It all depend on the current policies of MBB. It also depends on the Market Value vs Balance of Loan. There is a good chance that you may retain usage of the car with the permission of JIM and can continue with the HP instalments.
Okay, thanks a lot!

6.  Yes, they can be brought to court but cannot be made bankrupted under the new Insolvency Act as a Social Guarantor. Other modes of debt recoveries remain the same as a Judgement Debtor.
So if I surrender to JIM, will they be required to do so as well?

7.  APKP may not be able to help as the amount is too high. AKPK only help on Bank Debts.
How do I find out more? AKPK website not very helpful and nobody answers the phone.
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answered on Jan 15, 2019 at 15:57
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Bank Negara sued me.

Post image of the Writ of Summons they sent you for checking.
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answered on Jan 15, 2019 at 16:03
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@vkpc

Post image of the Writ of Summons they sent you for checking.
What will this prove? Is it any different if it is BNM suing or any other bank or anyone else?
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answered on Jan 15, 2019 at 19:57
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edited Jan 18, 2019 at 05:53
 
@Pelanty

1.  Already I have conflicting info telling me I can qualify for auto discharge and some telling me I must apply.
Read what is stated in the Act. You do have the wisdom to access the situation you are in. Different individuals may have slightly differing interpretations. My personal interpretation is just when there are conditions attached like "subject to", it is no longer "Auto" unlike some other advanced countries.

2.  So I don't know if AKPK can handle BNM cases. 
You are correct. AKPK cannot help as it is under BNM. AKPK can only reduce the interests element and with a 10 years maximum repayment duration period. Personally I do not see how it can help in your case.

3.  How much higher is slightly higher? Up to 20%? 
It is subject to your Income and Expenditure Statement tendered. It can be computed by your Official Assignee (OA). No hard and fast rule. The bankruptcy is not to squeeze blood out of stone, but merely to make one accountable for some debts actions and to repay restitution. At the same time, one need not pay the full Proof of Debts (POD) filed by creditors. The Target Contribution is purported to be 50% of all POD debts at current policies.

4.  What exactly is Case Management with JIM? Is that what people mean by surrendering to JIM and letting them restructure the debt and deduct salary? 
You do not surrender to Jabatan Insolvensi Malaysia (JIM), in bankruptcy, an adjudged bankrupt has to "report in" to JIM under the Insolvency Act 2017. By "restructuring" your debt means repayments via the Bankrupt's Estate within reasonable means. It can mean only a slight change in your disposable income. If you are at executive level, it could mean that your personal expenses can be higher than other cases of bankrupts. Case to case basis, like personal taxation. A man need not be dressed in shorts, wear singlets, use bicycles or wear slippers like in the old Malayan Straits Settlement days.

5.  So if I surrender to JIM, will they be required to do so as well? 
The answer is NO. Your bankruptcy is yours only. Does not affect them at all. And the current insolvency laws clearly state that social guarantors cannot be bankrupted. So your guarantors will not end up in JIM at all.
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answered on Jan 15, 2019 at 20:09
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edited Jan 15, 2019 at 20:12
by   carrie1226
Insolvency Rules 2017
Read here:
http://www.federalgazette.agc.gov.my/outputp/pua_20171013_PU(A)305latest12.10.2017.pdf

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