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Sufficient fund in frozen bank account to settle bankruptcy charge

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asked on Jun 2, 2019 at 23:17
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edited on Jun 22, 2019 at 23:50
 
I just noticed my bankruptcy status after bank frozen my account and the fund inside the account is enough to cover the debt with the bank which initiate the bankruptcy charge. However if other banks file for Proof of Debts, the amount will not be suffice to repay all debts and need to auction my house to settle the remaining amount.

Questions:

1) How can I quickly settle and discharge the bankruptcy status so that I can negotiate with remaining banks for installment payments and avoid my house being auctioned off?

2) Can I proceed to settle for lower amount with the bank for annulment and will the remaining fund be transferred back to me?

3) Or other banks will file Proof of Debts and need to auction off my house to settle everything? 
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7 Answers

answered on Jun 13, 2019 at 22:19
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edited Jun 23, 2019 at 00:25
 
@Jane70

Read here:

https://www.lawyerment.com/answers/questions/12924/annulment-of-bankruptcy-order-pembatalan-perintah-kebankrapan?g=3

https://www.lawyerment.com/answers/questions/13140/bankruptcy-malaysia-annulment-and-discharge-of-bankruptcy-cara-pelepasan-kebankr

Answer to your questions above
You can try to..

3) Or other banks will file Proof of Debts and need to auction off my house to settle everything?
Not if you can get an annulment before those other banks file their Proof of Debts.

Possible solution:
4.  Get an annulment done and everything goes back to normal for the other banks if there are no other defaults.

5.  The bank that bankrupted you may given you a token discount, but for annulment, Jabatan Insolvensi Malaysia will charge you a fee of 11-13% of the bankrupted amount. Have spare funds available.

6.  The bank that bankrupted you would be keen to close your case because if the other banks file Proof of Debts, this bank may just get a token figure from the amount sent to the bankrupt's estate by Bank Negara Malaysia for the closed account.
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answered on Aug 19, 2019 at 19:34
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edited Oct 11, 2019 at 16:22
 
@jeff005, thanks for your info.

I'm getting confused on the process now. The bank that adjudged me a bankrupt already received the notice that Insolvency Department will pay the agreed amount but already passed one and half month and didn't receive payment. The Official Assignee (OA) said still need to wait for other banks to submit Proof of Debts. I'm now stuck and don't know how to solve it. Can annulment be done by just paying the bank that bankrupt me or need to wait for other banks to submit the Proof of Debts? If yes, then how long I need to wait? 
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answered on Aug 19, 2019 at 22:06
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edited Oct 11, 2019 at 16:25
 
@Jane70,

Did you have other defaults with the other banks?
Did you contact the other banks and negotiate with them?

There is nothing much can be done if the Official Assignee insists on waiting.

Is one of the other creditors a "Housing Loan"? Speak to them, if your loan repayments is good, they may not file Proof of Debt now. They have 1 year to file Proof of Debt and that depends on whether there is a serious shortfall on the disposal (auction) of the property.
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answered on Aug 19, 2019 at 23:38
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edited Oct 11, 2019 at 16:28
 
@jeff005,

Appreciate your prompt reply. Yes, I have defaults with other banks. I have contacted them but some of them didn't even know my status now. I was so naive and thought that with fast action I would be able to settle my debt with the bankruptcy bank 1st and main few banks and get annulment as soon as possible. Subsequently, I could negotiate with the remaining banks. But it seems like they will go thru CCRIS and check all banks. 

My housing loan is with Public Bank, the officer told me that they're in process to get court order early next month to auction my house. I asked them whether they can accept any payments now from third party but no. The target auction date is October 2019.
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answered on Aug 19, 2019 at 23:45
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edited Oct 11, 2019 at 16:31
 
My frustration is that I don't know how long is the process which banks will submit Proof of Debts. If next month, only 2-3 banks submit Proof of Debts then it's sufficient for the settlement but if wait another 2-3 months and all banks submit their Proof of Debts then definitely I'm not able to pay all and get annulment. Then my house needs to be auctioned and pay off the remaining loans. 

Public bank told me that they only submit Proof of Debt after auctioning the property and the property market value more than enough to cover the housing loan and remaining will be remitted to the Insolvency Department. The point is I'm now trying to save my house but there are too many uncertainties...
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answered on Aug 20, 2019 at 00:41
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edited Oct 11, 2019 at 20:20
 
@Jane70,

My housing loan is with Public Bank, the officer told me that they're in process to get court order early next month to auction my house.
The court order may take time to come out.

And it does not mean can be sold off in the first auction because of the reserved price stated or offered. It may take 3,4,5 auctions. That is why those assets being held or charged to the bank, insolvency laws allow them 1 year to complete the auction process (the bank can even appeal for an extension after 1 year subject to the approval of the Director General of Insolvency).

How long the other creditors may take to file Proof of Debt is anybody's guess. The other banks may not be in a hurry to file Proof of Debt as it is well known that Jabatan Insolvensi Malaysia may take more than 2 years before declaring the dividends (proceeds) to those Proof of Debts creditors. That is why it may not be wise for banks to proceed with bankruptcy. Sometimes, the Proof of Debts creditors and the bank that bankrupted you may end up with nothing. For your case, you were careless and have too much cash in hand in banking accounts.

Do not waste whatever remaining cash in hand. Save it and hide it. Looking at the current situation, it is very difficult to save the house. The auction can be even 50% of the market value now that there is a glut in properties. Unless I have actual figures for computations, you may apply for discharge from bankruptcy after 3 years AND after meeting more than 50% target contributions. Bankruptcy is not to repay the total Proof of Debts creditors in FULL.
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answered on Nov 14, 2019 at 00:38
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@Jane70 im currently in your situation too. Planning to settle d debts wt d bank that file bancruptcy to me and save my house.i would like to know how did yours go after your last post?
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