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Transfer flat property to wife or sell it to avoid bankruptcy auction or lelong?

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asked on Aug 22, 2014 at 05:23
by   steven
edited on Jun 10, 2016 at 20:30
 
@gladt

I am glad you were able to fight off the bankruptcy proceeding recently and being awarded RM1000 as mentioned in the forum.

I need your advice. I owe 8 banks about RM100,000. I have an apartment worth RM150,000, (loan from bank C still left RM61,000), I am paying monthly installment about RM800 per month to bank C until age 65. I also owe bank C credit card RM25,000. I already stop paying those 8 banks 2 years ago including bank C when I could not continue paying Agensi Kaunseling Dan Pengurusan Kredit (AKPK) and interest keep piling up. I don't know when one or more bank will start bankruptcy proceeding on me.

My questions are:

1. Can I transfer the apartment to my wife name now before settling the loan?
2. If not, can I settle the balance loan amount then transfer to my wife name?
3. Can bank C block my application and freeze the transfer until I settle the credit card debt?
4. Some of my credit card outstanding amount already reached RM30,000 and above but why I have not received any bankruptcy notice?
5. Is it correct to say that if I successfully transfer the property to my wife, within 2 year if I am made a bankrupt, the bank still can auction my property?

Hope to receive your advice early. Thank you and God bless you.
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answered on Aug 22, 2014 at 15:54
by   bunker
edited Jun 10, 2016 at 21:09
 
How old are you now? Are you still employed? Any income or Employees Provident Fund (EPF) savings? Any other assets, like car or property?
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answered on Aug 22, 2014 at 20:57
by   steven
edited Jun 10, 2016 at 21:12
 
@bunker

I am 57 year old. Employed in Kuala Lumpur for 2 years. Income RM2,500 per month. Company doesn't pay me EPF but I got less than RM20,000 of EPF money from my previous accumulation. I got a 20 year old car worth RM1,000. One apartment worth around RM150,000 to RM180,000 but still under loan of about RM60,000. I also have a FOREX account with about USD1500 (playing EUR/USD).
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answered on Aug 22, 2014 at 23:11
by   gladt
edited Jun 10, 2016 at 21:14
 
@Steven

1. I won my case with the help (in the form of legal advice) from Notalawyer. He is very helpful.

2. I am only familiar with laws regarding bankruptcy notice and creditor's petition.

3. With regards to points raised by you, I am hereby giving you my opinion, and hope someone (such like Notalawyer) would correct me if I am wrong.

4. All the banks, especially Bank C has not commenced any legal proceeding against you.

5. It is normal bank practice to require you to settle the outstanding before allowing you to transfer the property.

6. It is better to sell, not just to transfer, the house to your wife or any of your relative to show that it is a genuine business transaction.

7. Bank C can only block your transfer after obtaining a Court order.

8. Creditors normally use bankruptcy proceeding as their last resort.

Hope these answer some of your questions.
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answered on Aug 23, 2014 at 01:49
by   steven
edited Jun 10, 2016 at 22:18
 
@gladt

Thank you very much for your reply.

1. If I sell to my wife based on the outstanding loan (RM60,000++) I owe to bank, will the bank C still block me from getting the strata title of the house? (because I still owe Bank C credit card debts amounting to RM25,000)

2. If I also settle Bank C credit card debts, will it be easier to get the title back and register it under my wife's name?

3. If within 2 years I am bankrupted by the other banks, will they take my wife's house and auction or "lelong" it? This what worry me and my wife (who don't want to move to other places).

4. Actually Bank C and 5 other banks already give me judgement in default since 2012. Although I put up some good fight with Bank C and delay the Judgement for 6 month, must thank you notalawyer and others for the guidance.

Your reply is very much appreciated. Any experience guys here can help to answer also, thanks.
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answered on Aug 23, 2014 at 02:59
by   Bladerunner
edited Jun 16, 2016 at 21:23
 
@Steven

You can call me Jeff.

I was in a similar situation 10 years at age 47, except differing amount of debts.

I take it at this point of time your credit cards debts including Bank C is around RM100,000? Plus additional housing loan with a balance of RM60,000 with Bank C?

So, by selling the house you would be debt free right? Then do it! Penniless but avoided Bankruptcy.

But time is against you, the interest charged on credit card is very high. It is snowballing fast and high. In another 10 months it could be totaling to RM130,000! Can your apartment value appreciate RM30,000 in 10 moths?

From what you write you are trying to save your apartment and prepare to default the credit card payment and prepare to be made bankrupt. But think of the procedures, is it workable? Transfer of name requires the property to be fully paid up first... You have the cash? And it could take months!

By going thru the Agensi Kaunseling dan Pengurusan Kredit (AKPK) programme, the banks would have known what you have and don't have and that is why they have not instituted proceedings against you. You still have assets. But the moment you sell, the other banks will act very fast to try to recover their monies. So, transfer or selling house to wife or close relatives is not the best solution.

Take note... Banks will issue
1. Letter of demand
2. Next file for recovery in court, latest 5 years and 11 months from date of your last payment (that is the 6 years limitation period). Get Judgement amount (Principal amount plus interest + other charges). Next step file for bankruptcy.
3. But the bank need not file for bankruptcy immediately. They have another 5 years 11 months period to do it. They wait at the last moment to file for bankruptcy on (Judgement amount plus accumulated interest). This is especially so when the Judgement amount is less than RM30,000 so wait till over RM30,000 to file for bankruptcy.

So, from my limited knowledge, from the last payment to banks for credit cards, there is a window period of 11 years and 11 months where bankruptcy can be filed. No necessary within months or years.

Note:- To experienced forumers, Please correct the above if it is inaccurate. This is just my personal perception...

My personal opinion, it is very difficult and not practical to try to save apartment. I sold mine fast below market value, but waited for 7 months for transfer of name and monies, then only I start to default any payments to credit cards. And the loan and one of the credit cards was from Bank C, but they did not deduct the cards amount because the account was still active. I do not want to run away from my debts, but I have 4 school-going kids to think of. My credit card debt was less than RM40,000, but one business creditor was suing me RM150,000. 4 years later, when I made my 1st Employees Provident Fund (EPF) withdrawal, I checked with the banks but the total accumulated amount was over RM80,000 - doubled what I withdrew from EPF. So I became bladerunner... hahahaa... run for my life.
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answered on Aug 23, 2014 at 21:32
by   bunker
edited Jul 27, 2016 at 18:25
 
You can transfer your apartment to wife's name as gift but loan in joint names. More legal fees involved and risk of banks' recovery under bankruptcy within 2 years of transfer. You may "sell" your house to close relative in "trust." Name changed. Can't sell or transfer to immediate family just before bankruptcy, two-year period problem.

I suppose you have refinanced your flat.  Next option sell or get it auctioned much later under  bankruptcy.
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answered on Aug 23, 2014 at 23:15
by   steven
edited Jul 27, 2016 at 18:33
 
@bunker

Thank you for your reply.

1. I don't quite understand how to "sell" house to close relative in "trust." Named changed.

2. If I manage to sell my flat to my wife (she has her EPF) below market value, and pay the bank outstanding amount, do we need lawyer to draft the S&P? My wife still wants to stay there, doesn't want to move out.

3. Will this kind of selling be call genuine business transaction. 'Gladt' mentioned this at point 6.

4. Once I pay off Bank C the housing loan and credit card amount, will that TRIGGER other banks to block me from getting my strata title transfer to other people's name?

5. Appreciate any forumer can give suggestions to the above questions.

@Jeff

Gratitude for your details explanations.

1. My wife has cash in hand RM60,000 want to buy my flat (below market price), thus settle my housing loan.

2. I also have enough EPF money to settle Bank C credit card debts.

3. Will that transaction TRIGGER or AWAKEN other banks knowledge of my transaction? I just don't like to wake up these banks at the moment, how?

4. Sometimes I still got collecting agent pretending to be court people wants to Writ of Seizure and Sale (WSS) my flat, I tell them go ahead but no action. I also ignore their calls. If they call again I request for their full name and I.C number and their tel number. I will lodge a police report and carbon copy (cc) to Bank Negara Malaysia (BNM).

5. If I sell my flat to my relative at RM150,000, can I also propose to rent it back at RM600 per month, present market rate, then my wife still has this flat to stay? I am paying the housing loan around RM650 per month.
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answered on Aug 23, 2014 at 23:17
by   gladt
edited Jul 27, 2016 at 18:34
 
@Steven

1. No matter at what price you sell the house, you need to settle the outstanding you owe the bank, otherwise, for sure the bank would not allow the transfer.

2. Since your creditors have already obtained judgement in default against you, you can expect bankruptcy proceeding in not very far future.

3. If you have settled the outstanding sums with Bank C (includes credit card debt), and if you have subsequently sell the house to other, with evidence to show that it is genuine transaction, I believe this transaction has no problem.

4.  Since bankruptcy notice has not been issued, you are advised to do whatever is necessary before it is too late.

4. Hope this reply answer some of your questions.
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answered on Aug 24, 2014 at 04:53
by   Bladerunner
edited Jul 27, 2016 at 18:47
 
@Steven

When I reply your posting, I have not read your point (4).

1. If 6 banks out of 8 have got judgement in default, there is no escape. High chances, one bank may initiate bankruptcy proceedings.

2. How to "sell" house to close relative in "trust." Named changed.
I take it as sell house to daughter or very close relative at market value, but you are servicing the loan. Yes, it may appear to be renting the house, ultimately the house may be transferred back to your "nominees" once fully paid up. But there is a problem upon your untimely demise years later, what if your "close" relative refuses to "give" back..? At our age, don't trust even your own children where money and property are concerned especially if there are a number of children involved. You may cause disunity and "break-off" of family over monies issue...

3. You are under the shadow of being made a bankrupt, selling the house to your wife whether at or below market value is not the best solution. Even if you get a buyer and you sell it at below market value, there is a chance, under special circumstances, whereby the Jabatan Insolvensi Malaysia (JIM) or Official Assignee (OA) may try to recover the difference amount, between market value minus purchase price, if they suspect "foul" play. That is buyers problem, not yours, but if buyer is your wife or close relative, the problem goes back to you... Please note that I can't confirm this problem, read somewhere in other forums.

4. Writ of Seizure and Sale (WSS)... A season forumer has commented that it is normally applied to business premises. But someone has commented that under certain circumstances, they can do it to individuals that is if one of the banks wants to do it. On the safe side, make sure you get receipts to prove it is not bought by you. Buy new things and charged by cheque or credit cards belonging to your daughter or wife.. Do more research on this issue.

Fellow season forumers, please help with this WSS..

5. The other 7 banks would have known of this property and know that it is "charged" to Bank C. If they institute bankruptcy against you now, they may get very little back since Bank C has the first charged and will have to settle ALL of Bank C outstanding amount, leaving the balance to be shared by the other banks. So, they wait and see, let you pay up more and more, but the banks may be monitoring this property and I don't know if they can place a second "caveat" on this property already... The banks have their own litigation department to monitor department recovery.

6. Wait for bank auction (lelong), not advisable.. It may take years or months to happen after bankruptcy, by then the debts are over blown by the interests... In any case you get nothing back at all. It goes to all your creditors, in your case to other banks. Moreover, your wife may not be able to buy it back unless it is bid at market value. Banks have their own 'lobang' to get it at their price. By the way, your wife cannot go and bid it by herself, have to go thru approved real property agents..

You can't wait any longer, sell as soon as possible, if possible for CASH and to other people. I fully understand your wife feelings for the house, I have been in the exact situation 12 years ago, but time is not on your side.. My wife couldn't take all the stresses, became depressive and pass on... So, at your age (I am older), settle all issues as soon as possible and have a peace of mind.. Being a bankrupt at our age is not a very big deal.. HEALTH IS!
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answered on Aug 24, 2014 at 16:16
by   bunker
edited Jun 16, 2016 at 21:28
 
Steven, did you owe one bank known as U**? Writ of Seizure an​d Sale (WSS) is their specialty.
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