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Will personal bankruptcy affect joined named property?

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asked on Feb 1, 2021 at 19:37
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edited on Nov 24, 2021 at 13:25
 
I'm looking for a lawyer to help with my upcoming personal bankruptcy. I have a property jointly owned with my siblings. They worried my personal bankruptcy will affect this joint named property. What should or can I do?

Thanks you.
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5 Answers

answered on Feb 2, 2021 at 11:56
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edited Nov 24, 2021 at 13:25
 
Your lawyer would inform you that this property will sure to be caveated by Malaysian Department of Insolvency...
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answered on Feb 2, 2021 at 14:46
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edited Nov 24, 2021 at 13:26
 
Hi Jeff,

Thanks for replying.

Will this joint name property be vested by Malaysian Department of Insolvency to pay creditors? I only owned 20% of this joint name property.

If yes what would you recommend steps to do? Should I sell my part 20% to another partners? Would it work?
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answered on Feb 2, 2021 at 15:06
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edited Nov 24, 2021 at 13:29
 
@Joyce1988

1. When an individual has been adjudicated a bankrupt, all assets will be vested under the management of the Director General of Insolvency (as trustee) regardless of the shareholding.

The following are factors which affects the any "foreclosure" of any properties.

2. It is a fully paid-up property or still under loan.

3. The number of co-owners.

4. Who are the co-borrowers and/or guarantors.

5. Or if the property is held "in trust" namely the name is inside but is not listed as a borrower.

In the event of other "constraints" faced by any "liquidation" of the said property, Malaysian Department of Insolvency will just "caveat" or block any sale or transfer of the said property. Malaysian Department of Insolvency will "claw" back this property even if it was transferred or sold, after "an act of bankruptcy" has occurred. Even claw back transfer of property to fellow family members, can be backdated 3 years (case to case basis).
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answered on Feb 2, 2021 at 21:38
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edited Nov 24, 2021 at 13:29
 
Thanks for the detailed input Mr.Jeff,

The property is still under loan, co-borrowers between siblings of 5. That's mean Malaysian Department of Insolvency will block any sale or transfer for this property only am I right?
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answered on Feb 2, 2021 at 22:40
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edited Nov 24, 2021 at 13:34
 


The purpose of bankruptcy laws is to bring relief to both debtors and creditors.

The foreclosure of one of 5 co-borrowers property under bank loans can cause bankruptcy or extreme hardship to another one or more other parties. It is at the prerogative of the Director General of Insolvency to decide what is a WIN WIN situation for all parties based on individual case, situation or circumstances. The snag is this: This property cannot be sold nor name(s) transfer until the said bankrupt have been discharged from his/her Proof of Debt creditors.

Do also note that it also cause distress to the banker lender if the repayments to this loan is prompt and good.

Read @Hanskacak case: https://www.lawyerment.com/answers/questions/13400/how-to-be-released-from-bankruptcy-cgc-requesting-for-a-lump-sum-payment

(Caveat : The above comment is written by a Q&A registered User. It represents a personal point of view only and not be regarded as legal advice.)
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