Debtors Petition: Self Application for Bankruptcy

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asked on Nov 24, 2014 at 00:33
edited on Jun 10, 2016 at 20:17
Personal Bankruptcy

What is personal bankruptcy?
Bankruptcy is a process where a debtor is declared a bankrupt pursuant to an Adjudication Order made by the High Court against the debtor if he/she is unable to pay his debts of at least RM30,000.00.

Who is a debtor?
A debtor is a person subject to the bankruptcy jurisdiction of the court within the definition of section 3(3) of the Bankruptcy Act 1967, and at the time the act of bankruptcy is committed:

• Was personally present in Malaysia; or
• Ordinarily resided or had a place of residence in Malaysia; or
• Was carrying on business in Malaysia either personally or by means of an agent; or
• Was a member of a firm of partnership which was carrying on business in Malaysia.

How a person can be made bankrupt?
The High Court makes a Receiving Order and Adjudication Order after a bankruptcy petition has been presented. It is usually presented either:

By creditor’s petition.
A creditor’s petition may be presented only upon the commission of an act of bankruptcy (section 3(1) of the Bankruptcy Act 1967) by the debtor which must have taken place within six months prior to the presentation. No creditor can present a bankruptcy petition against him unless the debtor:

Is domiciled in Malaysia; or Within one year before the date of the presentation of the petition has:

• Ordinarily resided in Malaysia; or
• Had a dwelling house in Malaysia; or
• Had a place of business in Malaysia; or
• Carried on business in Malaysia personally or by means of an agent; or
• Is, or has been within one year before the date of the presentation of the petition, a member of a firm or partnership which has carried on business in Malaysia by means of a partner or partners or an agent or manager.

To present a creditor’s petition the debtor must be owing the petitioning creditor a debt of not less than RM30,000.00.

By debtor’s petition.
A debtor’s petition is by itself an act of bankruptcy. The debtor’s petition is presented by the debtor to make himself a bankrupt in order to protect himself from his creditors’ claim that he knows he cannot satisfy. Unlike the creditor’s petition, there is no requirement that a minimum amount of debt must be owed before a debtor’s petition can be presented. After its presentation, a debtor’s petition cannot be withdrawn without the leave of the court.

The petition (Form 3 of Bankruptcy Rules 1969) is to be filed at the court of the State in which the debtor resides. Prior to the filing of the debtor’s petition, the debtor must first deposit with the Director General of Insolvency (DGI) a sum of RM1,500.00 to cover the costs of administering your bankruptcy. The court will not accept the petition for filing unless the receipt of the DGI for the deposit is produced. A sealed copy of the debtor’s petition must then be served on the DGI by post or otherwise. On the hearing of the debtor’s petition, the Court will make a Receiving Order as well as an Adjudication Order. However, if you are absent at the hearing, the petition may be dismissed.

Please note that bankruptcy is a serious matter and should be considered as a last resort. There are many restrictions imposed on bankrupts such as restriction to go abroad, acting as a director, carrying on business and requirement to contribute to your bankruptcy estate regularly for the benefit of the creditors. You will also have to give up your assets including your home and cars. There is no automatic discharge from bankruptcy in Malaysia. You may be discharged from bankruptcy by the Court or the DGI subject to any creditor’s objection.

Further Reading...

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9 Answers

answered on Nov 24, 2014 at 00:48
edited Jun 10, 2016 at 20:19

Reading the above, then you would have been wrongly made a bankrupt since you were overseas for 2 years... and was made a bankrupt locally without knowing it?


Your debts of over RM300K... You are still young, perhaps being made a bankrupt earlier MAY mean you are able to be discharged earlier (subject to any creditors objection) due to your medical condition.

Please take note that this topic is for discussion and not an ADVICE.
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answered on Nov 24, 2014 at 01:32
edited Jun 10, 2016 at 20:21
@bladirunner aka jeff005

My hire purchase bank told me other banks cannot 'tarik' my car if I pay my car loan promptly. If they want to 'tarik' they have to contact my hire purchase bank to find out my payment status.
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answered on Nov 24, 2014 at 03:43
edited Jun 10, 2016 at 20:41

Understand what is Hire Purchase Act. You are the the "Hirer", the "Owner" is your hire purchase bank. So how can other banks "tarik" or repossess? In a "bankrupted" situation, whereby you are not supposed to have money to continue anymore payments to the hire purchase Bank, bank has to repossess or "tarik" back the car and auction or "lelong" it, the balance of any monies pay to Jabatan Insolvensi Malaysia (JIM) or Official Assignee to be distributed to your creditors banks.

Your situation is different from others. The credit card banks will try to bankrupt you if they discovered you have disposed off any assets... cars, property within a 2-year period. JIM will "clawback" those properties or assets.

Read "Steven" case:

Your this current car is a liability for sure. How many more years? Current value vs hire purchase balance? Sooner or later you will loose it if bankruptcy proceedings is initiated against you. @vkpc has suggested to buy a car below RM5,000 in that post. @king still has a property "unsold or not transferred" with JIM, that is probably why the banks is still suing him in court despite having been bankrupted already.

For us stupid or clever "runners", "off the radar" means also we do not have any properties or cars in our name for the past 5 years or so. That is why some are successful in running, while some are not, because of having bought notable assets before. If a debtor is really poor and completely "dried", the creditors bank won't bother to bankrupt him or her.
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answered on Nov 24, 2014 at 12:47
edited Jun 10, 2016 at 20:42

15 more months to go, market value the most RM25,000. From what I read in Bankruptcy Act is the "clever" bank might "tarik" or repossess first, later Jabatan Insolvensi Malaysia (JIM) will most likely "give back" as I need to car to "go to work or to find a job".

Am I correct?
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answered on Nov 24, 2014 at 17:13
edited Jun 10, 2016 at 20:57

Any creditor bank of yours would try to repossess or "tarik kereta". Make no mistake in your assumptions. The hire purchase bank (insiders) MAY "sell" your fully paid-up status to others in need for a free lunch or at the badminton court.

Points to PONDER...

1. When declared a bankrupt, can the bankrupt drive a car registered under the bankrupt's name even though its value is only RM2,000. How to buy or renew insurance?

2. A bankrupt driving a car not under the bankrupt's name... Make sure there is passenger liability insurance for your passengers and if there is negligence in road accidents... e.g. crashing into students at schoolchildren zebra crossing, what recourse has parents got if child is disabled. Humans being have still got a moral responsibility towards society. A bankrupt got no money to pay! It has happened in Kuala Lumpur before, SMK Seri Sentosa, Jalan Kuchai Lama. He was a Form 6 student who obtained straight A's in SPM the year before.

3. If Jabatan Insolvensi Malaysia (JIM) gives back the car to a bankrupt, be it RM5,000 or RM300,000 can JIM be sued for negligence in not carrying out the duties responsibly?

4. By "allowing" a mental 'orang kurang upaya' (OKU) to regain possession of a motor vehicle which is supposed to be sold and proceeds to be distributed to creditors, the Official Assignee has already "committed suicide" him or herself! A BANKRUPT CANNOT HAVE ANY ASSETS UNDER MALAYSIA BANKRUPTCY LAWS. Liabilities - YES, including nasty spouses plus nasty mother-in-law...

5. Your case... Sell your car now and buy another registered in a relative name. You still have time to consolidate your resources before bankruptcy. Now you can understand why @Steven and I drive a 20-year old car... Hahahaaa... Still not sure? Ask @Steven and/or @vkpc. Even my 20-year car has passenger liability insurance bought.
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answered on Nov 24, 2014 at 17:47
edited Jun 10, 2016 at 20:58
Dangerous for bankrupts to drive carelessly...

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answered on Feb 20, 2017 at 14:59
edited May 15, 2021 at 21:32
Recently this is a spike in people asking me about:

Self Declare Bankruptcy

Hope this thread can shed some light.

Since the above was written 2 years ago, any update is much appreciated.
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answered on Sep 9, 2020 at 12:25
edited May 15, 2021 at 21:34
@Wai Wai


Please read on this topic here so that you can decide on your course of action.
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answered on Feb 4, 2022 at 22:35
Arty Party


Do read and understand this thread contents ngan teliti..
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