Any person who cannot pay a debt of RM30,000 can be declared a bankrupt under Bankruptcy Act 1967. Bankruptcy is a legal procedure involving an individual or business, who is unable to repay the outstanding debts.
When a person is declared Bankruptcy, the Directory-General of Insolvency will handle and take possession of all books of documents and account relating to their financial affair or property. Only after five year of bankruptcy, he or she can apply to the Directory-General of Insolvency (DGI) for discharge.
The DGI will consider the cause of bankruptcy, the bankruptcy’s payment to all his creditors, bankruptcy tenure, health and age of the bankruptcy and the level of cooperation given in the administration of his affair, before decide to discharge a bankruptcy case.
Department of Official Assignee The Department of Official Assignee in Malaysia is one of the departments under the control and management of the Prime Minister’s Department with twenty-one (21) branches situated in towns where there is a High Court and the headquarters is located at Putrajaya.
The development of bankruptcy law in Malaysia is governed by the Bankruptcy Act 1967 (hereinafter referred to as “the Act”) which is derived from the English Bankruptcy Act 1883 that governed the trade and commerce in England. The English Bankruptcy 1883 was adopted and modified in accordance with the local needs. The Act 1967 has been amended a few times and the most recent amendment was on March 2000 and came into force on
1-10 - 2003.
With the coming into force of the Bankruptcy (Amendment) Act 2003, the head of the Department of Official Assignee Malaysia who was formerly known as Official Assignee is now known as the Director General of Insolvency (hereinafter referred to as “the DGI”). The change of the title has no effect to his dual functions and responsibilities in the administration of the estates of the bankrupts and companies in liquidation.
What Are The Restriction A Bankruptcy Will Face When a person becomes a bankrupt, all his property will be vested in the official assignee who is appointed by the government under the Bankruptcy Act 1967.
- Cannot leave the country except with DGI’s permission
- Not allowed to take a loan exceeding RM1,000
- Not allowed to work with spouse, family or relatives’ company
- Cannot be a company director or take part in the management of company.
- Cannot be nominated for an elections.
- Cannot maintain any action except with sanction of DGI. Bank Account
Purchasing Life Insurance Policy
When a person becomes a bankrupt in law everything he owns (including his life insurance policies) becomes the property of the Official Assignee. He cannot buy an insurance policy without the permission of the Official Assignee.
The Official Assignee can and may give permission to a Bankrupt to buy a reasonable protection policy (i.e. a Term Policy) for the benefit of the bankrupt’s family. This permission has to be given in writing.
An effective route to address this problem is to get the spouse (of the bankrupt) to buy a policy on the life of the bankrupt. The policy will be owned by the spouse and not the bankrupt. In this arrangement, the official assignee will have no say over the policy.
Previous Insurance Proceed From Life Insurance Policy Before Bankruptcy Technically the Official Assignee manages all the assets of a bankrupt including the bankrupt’s life insurance policy. Where the life insurance policy is not assigned, then this policy shall be considered an asset of the bankrupt.
Insurance proceeds (claims, cash surrender value, maturity value, cash dividend, Bonus etc) are subject to the following treatments:-
The Official Assignee can and may give permission to a Bankrupt to buy a reasonable protection policy (i.e. a Term Policy) for the benefit of the bankrupt’s family. This permission has to be given in writing.
An effective route to address this problem is to get the spouse (of the bankrupt) to buy a policy on the life of the bankrupt. The policy will be owned by the spouse and not the bankrupt. In this arrangement, the official assignee will have no say over the policy.
Previous Insurance Proceed From Life Insurance Policy Before Bankruptcy Technically the Official Assignee manages all the assets of a bankrupt including the bankrupt’s life insurance policy. Where the life insurance policy is not assigned, then this policy shall be considered an asset of the bankrupt.
Insurance proceeds (claims, cash surrender value, maturity value, cash dividend, Bonus etc) are subject to the following treatments:-
A: Insurance Proceed - Bankrupt Still Alive
DGI is entitled to recover all insurance proceeds of life insurance from a bankrupt’s life insurance policy. For example, should a bankrupt exercise the option to terminate the insurance policy, DGI will seek to recover the cash surrender value. In another example, DGI is also authorize to recover insurance proceed from a claim proceed as a result of disability (example Critical Illness, Total & Permanent Disability).
B: Insurance Proceed – Death of a Bankrupt
In the event of death of a bankrupt, the insurance proceed shall be subject to the following treatments
I: Without Nominee - The insurance proceed (sum assured) shall be considered to be the estate of the deceased (bankrupt’s) where no nominee is named in the life insurance policy. The Official Assignee would have access to the insurance proceed
II: With Nominee - The insurance proceed is paid to the nominee and is creditor proof.
Employee Provident Fund (EPF)
DGI would exercise control over the EPF account of a bankrupt:-
Withdrawal – Bankrupt is Still Alive
A bankrupt is not entitled to with draw money from his/her EPF account without the written consent of the DGI. The DGI do provide written consent to bankrupt to withdraw money from his/her EPF in certain circumstance. However, it must be noted that the DGI can seek to recover the withdrawn money from the bankrupt.
Death Of A Bankrupt - In the event a bankrupt suffers death:-
A: Without Nominee - The EPF money shall be considered to be the estate of the deceased (bankrupt’s) where no nominee is amed. The Official Assignee would have access to the insurance proceed.
B: With Nominee - The EPF money shall be paid to the nominee and is creditor proof.
DGI is entitled to recover all insurance proceeds of life insurance from a bankrupt’s life insurance policy. For example, should a bankrupt exercise the option to terminate the insurance policy, DGI will seek to recover the cash surrender value. In another example, DGI is also authorize to recover insurance proceed from a claim proceed as a result of disability (example Critical Illness, Total & Permanent Disability).
B: Insurance Proceed – Death of a Bankrupt
In the event of death of a bankrupt, the insurance proceed shall be subject to the following treatments
I: Without Nominee - The insurance proceed (sum assured) shall be considered to be the estate of the deceased (bankrupt’s) where no nominee is named in the life insurance policy. The Official Assignee would have access to the insurance proceed
II: With Nominee - The insurance proceed is paid to the nominee and is creditor proof.
Employee Provident Fund (EPF)
DGI would exercise control over the EPF account of a bankrupt:-
Withdrawal – Bankrupt is Still Alive
A bankrupt is not entitled to with draw money from his/her EPF account without the written consent of the DGI. The DGI do provide written consent to bankrupt to withdraw money from his/her EPF in certain circumstance. However, it must be noted that the DGI can seek to recover the withdrawn money from the bankrupt.
Death Of A Bankrupt - In the event a bankrupt suffers death:-
A: Without Nominee - The EPF money shall be considered to be the estate of the deceased (bankrupt’s) where no nominee is amed. The Official Assignee would have access to the insurance proceed.
B: With Nominee - The EPF money shall be paid to the nominee and is creditor proof.
ReplyDeleteWonderful information. Thanks for providing us such a useful information. Keep it up.Principal Investments Proposals also offers the life insurance
I have a question. If the life insurance policy ( bought before the person become bankruptcy ) assigned to company as owner, is the owner( company ) a creditor proof?
ReplyDeletePao Li Ong - The Company is now the owner of the life insurance policy. Any life insurance proceed (surrender value, disability, death) payable to the company is a taxable income to the company and is not creditor proof.
DeleteThank you so much for the clarification! :)
DeleteHi pak Deh,
ReplyDeleteIf the life insurance policy proceed (bought before the person become bankruptcy) is given to daughter and son , is it creditor proof?
What if the life insurance proceed (bought before bankruptcy) is given to siblings? Is it creditor proof ?
If the bankrupt suffers death - the life insurance proceed is creditor proof. The life insurance proceed is then distributed to the nominee (beneficiary). The policyholder has the right to nominate beneficiary - ie - children, sibling
DeleteHi, Pak Deh,
ReplyDeleteWhat about Medical Insurance the Bankrupt buying for himself after he had been declare bankruptcy ? If he is not eligible to buy, can his employer buy on him as insured and the employer's firm as policy owner ?
Please enlighten...thank you very much..
Lickergan - A bankrupt need to seek DGI approval before purchasing medical insurance. DGI has no fixed formula for granting approval as it depends on various factors - eg type of medical insurance plan, amount of coverage and size of premium. Alternatively - an employer (policyowner) could purchase medical insurance on the employee (insured). Individual or Group medical insurance - may be used. Please note that the medical insurance premium (paid by employer) is treated as a company's expense. However, the medical insurance premium is treated as a taxable income to the employee.
ReplyDeleteHi Pak Deh
ReplyDeleteWhat about the medical insurance is purchased by the bankrupt person before he/she declare bankruptcy? Does he/she still entitled to claim the medical expenses and receive medical treatment in private hospital after he/she is officially bankrupt?
Another question, as he/she is knowing soon will be sued by creditors and might need declare bankrupt, can this person dispose off his/her properties before such legal proceedings take part on him/her?
Moreover, if she knows that her husband wills beneficiary person is her(bankrupt). To prevent the wills get freeze, the best solution is the husband wills make amendment to the children instead of his wife right?
Your advise is really appreciated.
Amie - Generally private hospital does not discriminate bankrupt as long as the bankrupt can pay for treatment. Similarly, insurer does not discriminate bankrupt either as long as the bankrupt (insured) is eligible to claim according to the policy contract. However DGI will seek to control over medical insurance proceeds paid to the bankrupt. DGI does not have a fixed recovery formula over the proceeds.
DeleteMany potential bankrupts are known to dispose of his/her assets prior to being declared a bankrupt. However this out-dated action does not prevent DGI from recovering this assets to repay creditors.
DGI will seek control over all assets of a bankrupt regardless of a will or without a will. A will does not transfer an asset. A will is merely a legal instrument to effectively dispose assets of a deceased in a structured, quicker and orderly manner.
Hi Pak Deh,
ReplyDeleteI am looking into buying medical insurance for both my bankruptcy parents. Can i have some advice/knowledge from you that how we can go about it? As i understand that the proposal form of each insurance has a question asking about "have you filed under bankruptcy...." and definitely the answer has to be a yes. Question, can they own a medical policy and assign and payor by daughter? Thank you
You should not have any difficulty to purchase medical insurance for your parent who is bankrupt. Buy the medical insurance as the policy-owner on the life of your parent as the "Insured". Do declare the bankruptcy (parent) status in the Insurance Application Form. Note - do declare that you (policy-owner) are paying the premium.
DeleteI submitted the case with Life A, under bankruptcy details. and my name only on credit card part. Do i do it correctly? or i should filled up my name on Life B?
DeleteThere are separate column for insured and policy-owner to complete in the Insurance Application form. Yes - if you are paying the premium (via credit card) - you did the right thing to complete & sign the section for credit card payment. I suggest you discuss with your Agent - as he should be able to advice you to complete the Life Insurance Application Form correctly (for insured & policy-owner).
DeleteHi Pak Deh, how about an insurance company which the contractor purchased goes bust?what can the client do?please enlighten, thanks.
ReplyDeleteMalaysian insurance industry is probably one of the most regulated industry under the jurisdiction of Bank Negara. It is highly unlikely for an insurer to "go bust" because of the many stringent regulatory requirements imposed by Bank Negara. Hypothetically - in the event an insurer do go "bust" - there are various mechanisms installed and this will not affect the rights of a policyholder. In addition, if an insurer "A" is sold to another insurer "B" due to whatever reason - the policyholder rights under the policy agreement (issued by insurer A) will not be affected under new ownership (Insurer B).
DeleteHi Pak Deh,
ReplyDeleteI just wanna enquiry..i have a case like maybank frozen my savings account..i have debts with other banks.do they have the right to do so? Whats the next step i should take? I went to home branch and they said its rhb case. While i check, myself is not under banckruptcy status yet..
Dear Unknown - This is not a bankruptcy issue. Someone has filed a case against you for an unpaid debt & won a judgement against you. You should have received a notice that your account will be or has been frozen and that certain funds are exempt from collection. To resolve your problem:- First option is to prove to the plaintiff's attorney that certain income (pension, socso disability payment, 90% of your wages in the last 60 days, life insurance proceeds etc for a complete list - pls refer to your solicitor) of yours are exempted by law from collection and requesting it be released. The second option is to file an order to show cause to vacate the judgement. I would recommend you select the latter option.
DeleteHi Pak Deh,
ReplyDeleteI've some questions wanna ask you about the bankruptcy problems.
Mind dropping me a SMS, so that I can contact you?
012-2847120
Thanks
Vin
Mr A is suing by ex-employer and might need declare bankrupt, can this person dispose off his properties before such legal proceedings take part on him?
ReplyDeleteIf the life insurance policy proceed (bought before the person become bankruptcy) is absolute assign to his spouse, is it creditor proof? Where the cash value will go if the policy mature (Insurance is one of the assets declare to court)?
Thanks & Best Regards,
June
Once the life insurance policy is assigned to another person, it is no longer the property of the bankrupt. Therefore - all life insurance proceeds from assigned policy is "Creditor Proof" (including surrender cash value etc).
DeleteGood Day Pak Deh, for the Life Insurance policy absolute assign to his spouse before a person bankruptcy, is it also need 5 years of waiting period? Which mean DGI have the right to trace back all the transaction done during pass 5 years, for transfer all the assets to family member.
DeleteHi Alex Diong - After bankruptcy is declared, the DGI has the authority to reverse any and all transfers backdating five years (and two years if you have sold any property). Cash value of a Life insurance policy is considered an asset and is subject to the above. However, DGI usually (note: this is not a norm) does not seek to recover from assigned life insurance policy.
DeleteDear Pak Deh
ReplyDeleteIf one is made a bankrupt and his name is one of the beneficiaries f
or a house according to the Will
made by the parent..Can the creditors or DGI take possession of the property? They re 7 names to the property. Thanks.
It is unlikely that DGI will take possession of the property. However - DGI will take control of your share of the property. For example - if all owners agree to sell the property - then DGI - will ensure that it recovers "your share" of the property to repay your creditor(s)
DeleteI have a property which I have gifted to my son 5 yrs ago will it still be subject to take possession by DGI. Also, I have sold my car to a used car dealer just before bankruptcy what happens. I own a life insurance policy with medical insurance inside what happens.
ReplyDeleteDGI is not entitle to recover assets transferred (sold/gifted) prior to bankruptcy. However if DGI has evidence and can proof that the asset transferred (sold/ gifted) is pre-planned to evade payment (to Creditor) - then DGI may seek to recover the said asset. If you have a Life Insurance policy and you are the owner - then all benefits (example surrender value, maturity value) may be recovered by DGI. I suggests you assign you life insurance policy to your spouse making your life insurance policy Creditor-proof (meaning DGI cannot recover any benefits from this assigned policy)
DeleteDear Pak Deh Can you explain what is assigning life insurance policy?
ReplyDeleteIf Mr.X became bankrupt, but the wife is paying the insurance,have nominated the "waris" how to save this policy? what should the wife do now?
Life insurance is similar to a physical asset (example a house) and can be assigned to another entity (person). Mr X must approach his life insurer and request for his policy to be assigned to another person (example - his wife). All he need to do is complete and sign a document to assign his policy (to another person). Once the policy is assigned to another person, the policy is a property of the assigned person.
DeleteDear pak deh
ReplyDeleteThank you for sharing such valuable info on your site.
I have a question.
Is unit trust funds creditor proof.
Thank you.
Unit Trust fund is not creditor proof
DeleteDear Pak Deh,
ReplyDelete1. My EPF has a nominee, how ever, my nominee pass away. As I am a Bankrupt can I re-elect a new nominee?
2. My life insurance is paid by me and have nominate my mother as a beneficiary, if as a bankrupt, can I still pay for my policy or does it means that my mother has to take over the monthly payments?
3. As a bankrupt, I cannot work for my reletive. But my brother in law is currently supporting me. Can I help him out without payments or salary? I dont want to be a burden on him. Difficult to get job as a bankrupt.
Thanks for your advice.
1): A Bankrupt has the right to nominate a new beneficiary in his EPF account.
Delete(2): Typically – DGI does not seek to prevent a Bankrupt from continuing paying premium on his/her life insurance policy. However – DGI may object to a Bankrupt from abusing life insurance policy by paying excessive premium to avoid repaying his/her debt.
(3): A Bankrupt my not work (as an Employee/Director) or be a Shareholder - for a company owned by his/her spouse or relative. You may assist (not as a Shareholder) your Brother-in-law – but you are not allowed payment (example Salary/Benefit/Incentive etc).
Wishing you quick recovery and success.
Thank you for your prompt reply, appreciate it.
DeletePak Deh,
ReplyDeleteMy parents are very old and wish to leave me some inheritance when they die ( some physical assets such as property ). How can they do that without the DGI getting his hands on them? It's just a matter of time before I will be declared a bankrupt. Can they put the property under a nominee or trust on my behalf?
If I am declared a bankrupt before I am 50 years of age, how do I withdraw my money from EPF when I am 50 and 55 without the DGI getting his hands on the money?
When you owe money, your creditors and DGI generally do not care what assets you use to settle a debt. One source of cash a creditor may try to obtain is an inheritance you have received. Generally, when you receive an inheritance, you get outright ownership of the decedent’s former assets, which can be used to pay off liabilities.
DeleteA Bankrupt may want to “disclaim” the inherited property. By disclaiming, you surrender all rights to the inheritance, which is then transferred to your lineal descendent(s) -- generally, your children. To ensure a creditor cannot claim the property, you should disclaim the property before you actually receive it. If you take possession of an inheritance and then give it to your children, a court may reverse the transaction and give the property to the creditor, by claiming the transfer was fraudulent and meant to deprive the creditor of what is owed.
If your inheritance is conveyed to you via a trust, it is protected from claims by your creditors. A trust is a separate legal entity that holds property for the benefit of beneficiaries. However, when the trust makes a distribution to you, your creditors can take what you receive, if the creditor has a court order.
A bankrupt is not entitled to with draw money from his/her EPF account without the written consent of the DGI. The DGI does provide written consent to bankrupt to withdraw money from his/her EPF in certain circumstance. However, it must be noted that the DGI can seek to recover the withdrawn money from the bankrupt.
This comment has been removed by the author.
DeletePak Deh, Thank you for your prompt reply.
ReplyDeleteIn what circumstances that you are aware of, will the DGI seek to recover EPF money from the bankrupt? Is it the amount of money withdrawn? If the amount is too big, maybe the DGI thinks the bankrupt has money to settle some if not some of the debt? What are some of the circumstances that you are aware of? Kindly enlighten me.
I owed 9 different banks ( 3 of them were over RM30,000 at the time ) for over 10 years. All were credit card debts. I haven't been made a bankrupt yet although I had debt collectors representing different banks calling me up and threatening to make me one over the years. I know this because I can still access my bank account with banks that I don't owe money and I can still travel abroad.
Usually how long does it take to make someone a bankrupt? I was advised by a former bankrupt ( This Singaporean friend was bankrupt 3 times before ) that it's better to let the bank make me a bankrupt instead of declaring myself a bankrupt. I have 6 more years before I am 50 and able to make my first withdrawal from EPF. I want to know as much as possible so that I can "plan" ahead.
Going to AKPK is out of the question as the amount I owe is way too much and I can't promise I can hold on to a job for long.
Fyi, I don't have any fixed income. The principal amount I owe to all the 9 banks was RM260,000. Now, the total owed including interest after so many years could easily be close to RM1 million.
What do you suggest I do between now and age 50? I will be starting a new job on 2nd May. My employer hasn't asked if I am a bankrupt and will be paying salary into the bank account of a bank which I don't owe money ( I was so glad that they chose a bank I don't owe money to ).
Thanks!
The ownership is on a Bankrupt to pay up his debts. DGI reserves the right to take action upon discovering a Bankrupt is evading payment regardless of the amount withdrawn from EPF.
DeleteTake note that - Creditor(s) has no right to recover money from a Bankrupt directly. An Administrator (appointed by DGI) has the exclusively right to recover money from a Bankrupt. A Creditor may alert the Administrator that a Bankrupt have money (for example - a Bankrupt withdraw money from EPF and the money is paid into a bank) and the Administrator will then take action on the Bankrupt to recover the money.
Normally Banks do not seek to recover debts from debtor (non-Bankrupt) directly - preferring to "sub-contract' this job to Debt Collector (who is more aggressive in recovering the debt).
A Creditor may initiate a bankrupt or an Individual (Self) may initiate to be declared a bankrupt. The process - normally - takes less than a month.
A Bankrupt is not prevented from employment. However it is the responsibility of a Bankrupt to inform the Administrator of your employment (to enable the Administrator to recover a mutually agreed amount for debt repayment). Failing to to so may result in the Administrator taking more severe action on a Bankrupt.
Dear Pak Deh,
ReplyDeleteI have a question regarding bankruptcy. If an individual is bankrupt or a company is bankrupt. Can he still sign SPA and purchase property? Thanks.
A Bankrupt is not restricted to sign SPA (and purchase of property). However - it would be extremely difficult (if not impossible) for a Bankrupt to obtain loan from financial institution. Take note that all SPA is routed to Inland Revenue. Eventually the Administrator (appointed by DGI) would be alerted (by a Bankrupt buying property) and will take appropriate action(s) to recover any money from the Bankrupt to repay the outstanding debts.
ReplyDeletePak deh.
ReplyDeleteIf my father is a bankrupt pass away for more than 3yrs ago. Can I apply for a discharge from the solvency department.
Personal Representative of a Bankrupt can apply for a discharge from DGI
DeletePak deh, when can I apply for a discharge for my father? After 5yrs after he passed away under Malaysia current law? Thanks you pak deh.
DeleteDear Leonard - you can apply to DGI - after 5 years has lapsed from the date of order. DGI will consider several factors - ie the conduct and cooperation of the bankrupt (while alive) and his representative (after passing), the extent of his (representative) co-operation with DGI, the cause for bankruptcy, old age, infirmities and death etc. Bottom-line is - DGI needs to be satisfied that a Bankrupt (and his/her personal representative) has made genuine efforts to repay the debts.
DeleteHi Pak Deh,
ReplyDeleteMy father is a bankruptcy and how do we go about if we want to surrender the policy and withdraw the cash value?
Banker's cheque? Bankruptcy couldn't open a bank account as we know. Whats the next option? Cash Cheque?
Thanks
Hi Pak Deh,
DeleteSorry, this is an insurance with cash value.
Thanks
Dear Tee Peng - ownership of the life insurance policy is critical. If your father is the owner (policyholder/policyowner), the cash value will be paid to your Father and creditor has the right to recover from the cash value. However if the life insurance policy has been assigned (ie to spouse or children) then the cash value will be paid to the assigned (assignee) person(s). In this circumstance - the creditor will not be able to access to the cash value.
DeleteThanks Pak Deh for the prompt answer.
DeletePak Deh, please advise the best way or how to go about for EPF withdrawal for a bankruptcy. What do we need to do first?
My concern :
- As a bankruptcy wont be able to open a bank?
- KWSP will issue a cash cheque to Banktrupcy?
- Can i open a joint name account with Bankruptcy?
Please advise
Thanks! Appreciate that
Dear Tee Peng - a bankrupt (still living) is eligible to withdraw money from EPF (subject to EPF guidelines). However it is likely that EPF will pay to Jabatan Insolvensi Malaysia (JIM) and will be use to repay the outstanding debts. When EPF Fund is withdrawn while the bankrupt is still alive - this money is not creditor-proof. Please do take note that a Bankrupt may open a bank account with the approval from JIM.
DeleteHi Pak Deh,
DeleteCan we remove a bankruptcy from a joint name property. (Property no longer under mortgage)
Please advise. Thanks
Once a person is declared a bankrupt - all his/her property becomes the legal property of the Trustee. You will need the approval from the Trustee to remove a bankrupt from a join-property.
DeleteHi pak deh,
DeleteTrustee will be the DGI?
Trustee is appointed by the DGI. You can get more information from this site http://www.shearndelamore.com/assets/templates/images/pdf/paper_publications/Restructuring_and_Insolvency_2009.pdf
DeleteHi Pak Deh,
ReplyDeleteIs there a rule stating the maximum basic life insurance sum assured a bankrupt allowed to insure?
thanks.
There is no fixed guideline on the maximum sum assured for a bankrupt. Life insurers shall perform "credit underwriting" to align with the "worth/sum assured" of a bankrupt.
DeleteHow does the EPF knows whether the person who withdraw the money is a bankrupt?
ReplyDeleteEPF does not know whether the person who withdraws the money is a bankrupt and EPF does not care. EPF makes payment (EPF's withdrawal) via check only (therefore the recipient must have a bank account).
DeleteThis comment has been removed by the author.
DeleteHi Tee Peng - upon withdrawing EPF money, the ownership is on a Bankrupt (not EPF) to repay his/her outstanding debts. Its like jumping the red traffic light. It is only illegal if the violator is caught.
DeleteIf i do an absolute assignment of my insurance procceds to my benefiaciaries, if it immediate effect or have to wait a certain period after my death, if not my creditors can claim.
ReplyDeleteAlso need it be absolute assignment or just a nominee will do?
Hi - just appoint a Nominee and the life insurance proceed shall be paid to the Nominee (immediately) and the proceed is creditor proof. Absolute assignment is about "transferring" the policy ownership to another owner (however this is not a preferred route for creditor proof). For EPF - same application - just name the beneficiary(ies) anytime and the effect is immediate. The death proceed to beneficiary is creditor proof.
DeleteTQ Pak Deh
DeleteI meant 'is it immediate effect'
ReplyDeleteSame apply to EPF nominations?
ReplyDeleteIt is immediate effect, no need to wait a certain period otherwise creditors can claim?
What happened to creditcard or any 'unsecured' bank loans if someone passed away without a will?
ReplyDeleteWill the spouse or next of kin be liable for the loans? Or will the bank send debt collectors to come after the spouse or next of kin?
Is it better to do a will even though net liability is more than assets?
The property of a deceased person is known as his estate. When a person dies without making a will, he dies intestate. The law provides for the distribution of the property of a person (Muslim and Non-Muslim) who dies without making a will. Creditors have the rights to recover debts from the estate. Spouse & next of kin will not be liable for the debts (unless they are guarantor of the debts). It is wiser to have a will regardless to ensure an effective and efficient distribution of estate.
DeleteHello Pak Deh,
ReplyDeleteWhat happens if a person who is a bankrupt since 2008 (over 5 years now), but never re-pay his debt, still working and have one account. He now able to apply new life insurance (approved). Is he still a bankrupt? Can he apply for discharge even if the debt is not fully paid?
Hi - a Bankrupt is eligible to apply (to DGI) for discharge after 5 years regardless of outstanding debts. Bankrupts are encouraged to approach and discuss with DGI. A Bankrupt remains a bankrupt until discharge by DGI.
DeleteDear Pak Deh,
ReplyDeleteMy parents had been made a bankrupt since 2004. Mom has been paying to dgi but dad never appear to DGI until lately after I approached the creditor on my parents's behalf to strike a deal on amount of settlement. Creditor agreed verbally amount of settlement that I proposed with the condition I will pay for all the cost that will incur include their lawyer fees. Creditor also said that their lawyer advised them that after I pay the money to the creditor, their lawyer will give us a letter declaring that we dont owe them anymore where we can later on bring the letter to dgi for discharge application. Nevertheless, I read on mdi website that bankrupt can only pay through insolvency and must never pay the creditor themselves. Please advise the best solution for us. We (children) are trying very hard to get them discharge by our hard earned money as they are getting old. How to minimise the cost that will incur? We really need your help.
The critical question is - what is the advantage to settle the debts and obtain a discharge (since your parent are old). If there is no significant advantage - then it is preferable to remain as a bankrupt. Repayment must not be paid to the creditor directly. Payments must be made to DGI only and the money goes to the bankrupt's estate. The DGI then uses the money (from the estate) for disbursement to the creditor(s). It is obvious that this creditor is misleading you (to suggest you pay them directly and pay for their lawyer's fee). If you (children) is not a guarantor to your parent's debts - then you are not oblige to repay the loan. Take note - this is your parent's debt - it is not your (children) debt. Do not make any deal with the Creditor (and especially do not pay them directly). Go and negotiate with DGI (directly) on the discharge. DGI is usually empathetic with the main objective to resolve bankruptcy issue on a win-win result. You will be surprise (very surprise) - how much "haircut" a creditor is willing to take to quickly settle the outstanding loan.
DeleteThank you for your advice Pak Deh. We wish to bring them go for vacation overseas cant due to the restrictions. Dad is slightly over 60 with heart disease and mom slightly younger but never involved in the business and yet got bankrupt because dad put her name in the business registration. I also have property joint name with one of them bought a year before they got sued bankrupt. I have no choice but to serve the loan once I graduated and the bank charged a very high interest due to lapse during the progressive interest charges. I couldnt restructure the loan due to the legal tag. If I dont pay and let the property be auctioned, my cecres will be affected. And If I have to buy over the part of property that I am the one that had been paying most of it, I thought I might as well negotiated a settlement amount with the creditor and get them discharged. What would be the best way to do it? I was thinking to go through dgi as you mentioned, propose the amount of settlement with the creditor. What say you?
DeleteJoint-ownership of property with a Bankrupt normally increases the complexity and problem. However - do remember that you (non-bankrupt) should not be a victim. It would be best to negotiate directly with DGI for a win-win deal. Remember - the main objective of DGI is to resolve bankruptcy case and if your proposal is reasonable - DGI will be more likely to support it. Bankers are businessman - they will be more likely to accept steep haircut rather than losing all if you and family walk away.
DeleteI would like to purchase insurance policy for my spouse who is a bankrupt.. do I need to inform agent about his bankruptcy status?
ReplyDeleteSpouse have insurable interest (on each other) - technically it is perfectly legal to purchase life insurance on your spouse. A bankrupt spouse does possess "Financial Value" and is recommended to seek financial protection for financial loses under life insurance. You need not inform the agent or insurer (unless they asked for it).
DeleteHi Pak Deh,
ReplyDeleteI've been reading a lot and your input and answers to all the queries here has been very valuable to me.
Long story short, I suspect I may be at risk of being made a bankrupt in the coming year because I signed something which would make me liable for my father's bank debts, which I'm quite unhappy about.
In order to protect my assets against creditors and the DGI, I have considered the following:
1) Buy savings/investment-linked policy under my wife's name with any cash value payouts to be paid to her.
2) Buy savings/investment-linked policy under my name but make my wife nominee.
3) Buy savings/investment-linked policy under my name but assign it to my wife.
On reading some of the provisions under the Insurance Act 1996 (Section 166 and 168) I am leaning towards no. 3 above as I don't feel no. 1 and 2 offer enough protection from creditors or the DGI. Could you advise on which is the strongest step that I should take, or if there are any better ways in order to make the proceeds creditor proof?
Would be pleased to hear from you. Thank you.
The best option is your wife (applicant & insured) buys the Investment-linked policy (and nominate your children as the beneficiary). Do not assign the policy to you as this will make the policy an asset under you. Typically - Life Insurer does not care who pay the premium.
DeletePlease take note that the Bankruptcy Act is designed to prevent bankrupt from trying to defeat, hinder or delay creditors from recovering the debts owing. Any settlement or transfer of property shall be void against the Director General of Insolvency if the settler becomes a bankrupt within 2 years after the date of settlement.
If the settlor becomes bankrupt within 5 years after the date of settlement, the settlement or transfer of property will be void unless the parties can show that the settlor was able to pay all his debts at the time of making the settlement without the aid of the property.
The only exception is where (a) the settlement was made before or in consideration of marriage or (b) if the settlement was made to a purchaser in good faith and for valuable consideration.
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ReplyDeleteHi Pak Deh,
ReplyDeleteWould like to get your advice on the below questions regarding insurance.
1) A wife buy an insurance for her husband (declared bankruptcy) for term life insurance (with death, critical illness & permanent disability protection)
- If the husband fall under CI/ TPD, the money given from insurance can be credit proof?
2) Can the bankruptcy husband open a bank account by joining account with wife?
3) If the wife nominate her husband for her insurance, anything happened to the wife (death),is the money that goes to the husband credit proof?
1: When a wife buys a life insurance policy (called applicant & policy-owner) on the life of her bankrupt husband (insured) it is recommended to nominate herself as the beneficiary. All insurance claim proceed (death, CI, TPD) will be paid to the nominated beneficiary (wife) and the proceed is creditor proof.
Delete2: A bankrupt need the permission of DGI to open a bank account. However - DGI is unlikely to allow joint-account due to potential abuse. Practically - it would be unwise to have a joint-account (with a bankrupt spouse)
3: If a wife nominate husband as the beneficiary, then the claim proceed (death) will be payable to the husband (nominated beneficiary). However it is unwise to nominate a bankrupt husband as a beneficiary because any proceed payable to a bankrupt, will be subject to recovery by creditor/Administrator.
Hi Pak Deh,
ReplyDeleteWould like to get your advice on the below scenario on jointly-owned property. Thanks.
Scenario: Joint-ownership of a apartment (property no longer under mortgage) with a family member.
1) If that family member becomes bankrupt because of car hire & purchase, can the joint-name property be auctioned to repay the amount owed?
2) If the property is to be auctioned, will the other owner receives his share of the property and how ?
In a scenario where there is no outstanding mortgage.
DeleteQuestion 1: Technically Yes - but practically - who (Buyer) would want to buy half ownership of a property??? So you should not be too overly - worry on this scenario.
Question 2: If the property is auction-off - then the Administrator (appointed by DGI) will seek to recover the money from the bankrupt's portion only.
Hi Pak Deh. What if company buys a group term life insurance policy, employee dies, no nomination made and employee was a bankrupt. Does the insurance money go to the company, the employee's estate or to the Department of Insolvency? Thank you.
ReplyDeleteWhen a Company buys a Group Insurance Policy - it must nominate itself as the beneficiary or allow each employee to nominate his/her own beneficiary.
ReplyDeleteIf the Company nominate itself as the beneficiary, then the death claim proceed will be paid to the Company. The Company may (elect at its own discretion) use the death claim proceed (full or partial) to pay the employee's beneficiary (herein also called - exgratia payment). This is creditor proof.
In the Group Insurance where the employee nominates his/her own beneficiary - the death claim proceed will be payable to the nominated beneficiary. Death Claim proceed paid to Beneficiary is creditor-proof.
If the employee did not nominate his/her beneficiary (died Intestate), then the death claim proceed will be payable to the employee's Estate. Here - the death claim proceed is not creditor proof.
Thank you, Pak Deh. However, the deceased was a bankrupt and there was no nominee. Assuming that the death claim proceed is payable to the deceased's estate and since you had mentioned that it is not creditor proof, would it be correct to say that company should pay the money to Department of Insolvency? Would it make a difference if the deceased is a Muslim? Thank you.
DeleteCorrect - ie - the death claim proceed will be payable to the deceased's (bankrupt) Estate in the event there is nominated beneficiary. A bankrupt's Estate would be managed by an Administrator (appointed by the DGI). The death claim proceed paid into the Estate is not creditor proof. The recovery of money from a bankrupt deceased's estate is the same for all Malaysian regardless of religion.
DeleteHi Pak Deh, you mentioned that "If the Company nominate itself as the beneficiary, then the death claim proceed will be paid to the Company. The Company may (elect at its own discretion) use the death claim proceed (full or partial) to pay the employee's beneficiary (herein also called - exgratia payment). "
DeleteHaving obtained the death claim proceed, is it advisable for the company to prepare a nomination form to enable the company to release the death claim proceed to the employee's beneficiary? A nomination form prepared by the company is sufficient?
In the event of an exgratia payment - a Company is not obliged to pay (amount or nominee) or to prepare the nomination form. Different company would approach this in a different manner as exgratia payment is not contractual. I agree with you that -a nomination form would have been a better approach. But by allowing an employee to nominate beneficiary - there is an implication that the company will pay exgratia upon death. This implied action would deter most company to prepare nomination form.
DeleteIn another scenario - where the death benefit is a contractual agreement (example employment agreement), most company would prefer the employee nominate his/her beneficiary. If there is no nominee, then the death proceed will be payable to the estate of the deceased.
Hello Pak Deh, if a husband were to be made a bankrupt, how far will the law allow for the wife's assets to be taken. Will any cash savings in her name be forcefully taken?
ReplyDeletePlease take note that the Bankruptcy Act is designed to prevent bankrupt from trying to defeat, hinder or delay creditors from recovering the debts owing. Any settlement or transfer of property shall be void against the Director General of Insolvency if the settler becomes a bankrupt within 2 years after the date of settlement.
DeleteIf the settlor becomes bankrupt within 5 years after the date of settlement, the settlement or transfer of property will be void unless the parties can show that the settlor was able to pay all his debts at the time of making the settlement without the aid of the property.
The only exception is where (a) the settlement was made before or in consideration of marriage or (b) if the settlement was made to a purchaser in good faith and for valuable consideration.
Hi Pak Deh,
ReplyDeleteWhat happen to oversea cash and fix deposit? Can DGI take the money from oversea account?
Yes. DGI may institute any action or legal proceedings relating to the property of the bankrupt, which could include proceedings for seizing debtor’s assets abroad. However, this will generally depend on the enforceability of foreign judgments under the law of the country where the assets are located. In particular, Bankruptcy Act provides for close cooperation and mutual recognition for the bankruptcy courts of other “designated countries”.
DeleteHi Pak Deh
ReplyDeleteI'm blacklisted with frozen bank accounts. I have medical claims recently, how can I claim those money n pay it back to my sister?
Most (if not all) insurer standard operating procedure is to make claim payment into the bank account of the Policyowner. I doubt if any insurer is willing to pay cash to you. Also, do take note that a Bankrupt can open a bank account with the approval of the Official Assignee for crediting your monthly income. You should discuss this possibility (open a new bank account or activate the frozen bank account) with DGI enabling you to repay your sister. Please do take note that DGI can be flexible and can assist you as long as you are sincere in repaying your debts.
Deletethanks for your reply. but I'm not bankruptcy due to debts is under rm50k. only can't open any bank account anymore. any possibility insurance company will issue under my sister name if I submit my blacklisted document from bank negara? or can u recommend me any other way?
DeleteIt is unlikely that an insurer will make payment in your Sister's name. Malaysian insurers are especially not known to be helpful or flexible. However having said that - I would still recommend you discuss with them - any other possible option.
DeleteHi Pak Deh,
ReplyDeleteMy parents divorced five years ago and my mother and my sister passed away at the same time few months ago, I did apply LA to get my mother’s asset and claim all the insurance. My father is a bankruptcy person so can he authorize me to claim all my sister’s asset? Or the insolvency will claim all the asset to cover my father’s debt? Can I apply LA to be the executor for my sister’s asset?
Hi Amos Lian - as a sibling - you should be eligible to apply for an LA to be the Executor for your sister's asset. An Executor works closely with the Court to manage the assets of a deceased. You should not distribute asset to your father (who is a bankrupt) as it may be subject to recovery by DGI. I suggest you engage a Lawyer to assist you.
DeleteHi Pak Deh,
ReplyDeleteMy brother has credit card debts of RM 60,000. I would like to ask if he open a SSPN account (education saving) for his kid (10 years old), will it be affected if one day he become bankrupt. The credit card interest is keep piling up.
Creditor will not be able to access (claim) fund deposited in SSPN for your children's education.
DeleteSalam Pak Deh,
ReplyDeleteI forsee myself will turn bankrupt in less than 6 month.
EPF wise, i hope that can be used for my children future oversea education, but i have not nominated my only kid yet (now 7 yo). Any issue on this? Meantime, every year i need to withdraw the dividend to support my kid education. Possible to transfer that sum into my or my parent bank account?
Lastly, i will seek for Socso invalidity pension soon because of some disability diseases with me. Invalidity pension or other forms of pension/benefits are creditor proof right?
TQ.
Salam
ReplyDelete1: Please take note that a Bankrupt is not eligible to withdraw money from his/her EPF without the written approval of DGI. Generally DGI do allow for EPF withdrawal if your request is reasonable. You are recommended to approach and discuss this with DGI.
2: It is highly recommended that you appoint a beneficiary or beneficiaries to your EPF account. Please do not appoint a minor as a beneficiary as this will lead to more complication.
3: Yes - SOCSO invalidity payments are creditor proof.
I pray for your quick recovery and good health.
Greeting Pak,
ReplyDeleteIf i may ask question on invalidity Pension from Socso
1) I suffered from Tophy Gouty Artrithis and Rheumathoid Artrithis. Is this under Socso critical / disabilities list?
2) I am still employed. But i need a Medical Board Out from my company for purpose above. My company see my valid reason for MBO cos my producivity has really reduced bcos of these deseases. What if Socso dont see it the same way. Can i still continue work at the same company without any change in pay and position? Or do i have right to ask a Conditional MBO with the right to return to work?
THANKS.
1: The list illnesses is not critical. More importantly is - the Medical Board or Appellate Medical Board (under the jurisdiction of Perkeso) is the body that determine and certify the invalidity of a Member.
Delete2: Your Company may agree with you on your request for MBO but this is strictly an arrangement between you and your Company. As far as Perkeso is concern - they will adhere to the MBO guideline as explained in item 1 above.
3: In the event your Company wishes to continue to offer you employment (regardless of the status of your claim to Perkeso) - it is strictly a private arrangement between you and your Company (and has no relation/impact on Perkeso).
4: You can get more information (MBO, Perkeso) at
https://www.perkeso.gov.my/index.php/en/pencen-ilat
Wishing you quick recovery and good health
Dear Pak Deh,
ReplyDeleteCurrently i am on AKPK program to repay back all my credit card loan. Monthly figure is around 6k for 10 years. I have paid it for 1 year and i foresee turn into bankruptcy in less than 6 months time as i have burnt all my saving.
I have transferred my 1 landed house to my wife and son (as a Gift) in May2017. My wife really need the house to stay and here is my question.
1) If i declared bankcruptcy now, will DGI void this transfer?
2) If i declared bankcruptcy after May2019, will DGI still void this transfer?
I would like to seek for your advice about my move above as my wife is really worried this matter.
Appreciated and thank you in advance for your advice!
Once declared bankrupt, all assets, including property, will be seized by the DGI. If you think you can fool the system by transferring or selling your property to relatives prior to the bankruptcy, think again.
DeleteAfter bankruptcy is declared, the DGI has the authority to reverse any and all transfers backdating five years and two years if you have sold any property.
So, if you transfer an apartment unit to your relative in the face of impending bankruptcy, the DGI can make it void and subsequently, seize and liquidate that piece of property through an auction.
However, if you sell the property at a fair market value, it may not be seized as it could be viewed “in good faith”, meaning you did not sell the property with the intention of “protecting” it from the bankruptcy.
Dear Pak Deh,
DeleteThank you very much for your quick reply as well as the information!
Based on current status, since i have transferred the property to my wife and son as a gift in almost 1 year back, if my sister/brother will consider to purchase the property at a fair market value from my wife and son, and she/he will take the housing loan from bank, DGI will not seized this property after i declared bankrupt right?
Much appreciated and thank you in advance for your advice again!
Mr. Tan - The main role of DGI is to recover assets from Bankrupt to repay creditor. Transferring and/or selling assets to avoid repayment is a key area DGI will focus on. It is not a guarantee that DGI will not take action to recover the said asset. In addition - you should look at the angle of multiple ownership of the asset that you have transferred and/or sold. It would be extremely difficult for DGI to recover any asset if there is multiple ownership on the said asset. This will entail prolong negotiation and/or legal entanglement with multiple owners that may not appeal to DGI.
DeleteDearest Pak Deh,
DeleteThank you very much for your advice.
If that's the case, i will request my wife and son to sell the property to my 2 daughters (multiple ownership) as soon as possible before i proceed for the bankruptcy.
So sorry, I have some questions to ask:
1) If i am not selling to my brother/sister, but to my daughter, is she considered as "Third Party"? Since she is my direct family member.
2) After i sold the house and all the transaction completed. How many months should i wait before I go for bankruptcy? Or i can directly stop the payment to AKPK and wait for bankruptcy?
Really appreciated and thank you in advance for your advice. I need help.
Mr. Tan - Personally I would sell the property to my brother/sister over to my daughter. The further the relationship (of the buyer) to you - the better. Take the money and hide it well and never never never put it under you or wife or children's asset. Once the transaction is completed - you should try to delay the bankruptcy as long as possible. You should also consider to stop payment to creditor - since bankruptcy is inevitable - why even bother to pay the creditor more. Again, personally I would let the creditor take the initial action (you need not assist them to make you a bankrupt). In the meantime - get prepared to face the challenges of a bankrupt. Bankruptcy is not the end of the world. President Lincoln and Trump was made a bankrupt many times and emerged as a President. Take care and take charge
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DeleteSalam Pak Deh,
ReplyDeleteOn Mr Tan case, few questions i would like to add on
1) DGI will seize all assets? Is that includes my old TV, old furnitures, my beloved oil painting....?
2) On car ownership. Guess my old car will be taken away too? Will DGI allow car ownership below $XXXXX value for purpose fetching my old mother for medical checkup, go to work, ....?
3) As we still working, will our present account for salary bank in be remained, no need to change?
4) I heard from AKPK, we can request just to deduct as low as rm100 per month from our monthly salary. It is true. Best if no need to payback a single cent !!!
5) My case is after many rounds of auction, my loaned property still unsold now because of current worst market condition. Amount owned to my Bank, under Islamic loan getting bigger ... near 200K ! As you advised Tan, i will do the same ie wait for the Bank to sue me Bankrupt. Thats OK ???
6) I choose to Bankkrupt so that my saving in KWSP can be used for my children (OKU) future oversea education. Will DGI allows yearly withdrawal of KWSP dividend to support / raising my OKU kid financial needs?
Please advise. THANKS Pak Deh.
Salam
Delete1) DGI has the authority to recover any asset from a Bankrupt to repay your Creditors. However, they will focus on assets with substantial financial value. I doubt they will go for assets that does not have high financial value.
2) Again, that depends on the value of the car. If the car is of value and do adds up to the repayment of the Creditor, then it is highly possible that DGI will go after it.
3) DGI will allow a Bankrupt to have a savings account with a bank - primarily to facilitate your employer to deposit your salary. The DGI will inform you of this process.
4) DGI will review and recommend the minimum monthly repayment amount. No need to pay back a single cent would be too ambitious unless due to some extraordinary reason.
5) The Bank has a fiduciary role to ensure your house are not auction way below market price. And unpaid mortgages will accumulate on-top of existing loan. You may initiate (petition) a voluntary bankruptcy - but personally, I feel it is not advantageous to do so.
6) DGI will not allow a Bankrupt to withdraw from EPF unless you obtain a written permission from DGI to do so.
Hope the above helps you to make the right decision.
3) Still DGI will deduct 10% out of my salary?
Delete5) "not auctioned way below mkt price". Whats the diff maximum allowable for a proprerty currently at 400K? It seems the call for auctions non stop (4th rounds already!)
6) Permission to withdraw annual dividend to support family / child education or eventually (10 years later) full withdrawal for child oversea education can be granted?? These monies still creditor proof??
Many Thanks Pak. You the Greatest help to layman like me.
Hi - with reference to your question no 3) The amount of deduction of a bankrupt's salary is subject to your negotiation with DGI. There is no fixed amount or hard-rules on this. DGI is unlikely to squeeze a bankrupt dry making life difficult for a Bankrupt (and family). Therefore a reasonable amount will be agreed upon.
Delete4) The bank will appoint an auctioneer to auction the house. Auctioneer will always have a reserve price for house under auction and this reserve price is based on the report submitted by their appointed Appraiser (or Surveyor). The Bank will persist with the auction, and is expected to gradually lower the reserve amount until the property is dispose-off. Take note that the bank has an financial interest too - to ensure the house is not disposed at an amount that could result in significant losses (to the bank).
6) Regardless of any reason - you need to discuss this with DGI and obtain their approval to allow you to withdraw money from your EPF. Once money is withdrawn from your EPF account - it is no longer creditor proof.
Good day Pak Deh,
ReplyDeleteMy questions 1) I expect bankruptcy soon too, but dont know when? Is delaying bankruptcy a good move cos' if i stop paying monthly instalment Retailers, and even Finance Cos (aka Ah Longs), they too will chase after me or even sue me Bankruptcy before the Bank comes in ! If the former group of Creditors total combined outstandings exceeds rm50K, will they bankrupt me first, OR can ask Court to hold on to combine with the Bank's which may come to rm100 or more!
2) Finance Co. (aka Ah Long) whom may have sold my loan to a 3rd party (can be Gangster!), upon my bankruptcy, that 3rd party have no right to claim right? If i stop paying them now, should i be telling them who and who will take court order on me soon, therefore i will stop payment! Any risk in so doing?
3) My KWSP. If i nominate my mother, my request for withdrawal will goes to my mother right? NO creditors can demand payment from her right? What if, touch wood, that day comes and my mother no more around, can i renomlnate my sister? When either my mother or sister received the sum, i can use it right?
Thank You.
Hi
Delete1) 2 or more Creditors may join together to bring a Creditor Bankruptcy Petition.
2) I doubt the Finance Company sold your loan to a Third Party. The Finance Company is more likely to appoint a Debt Collection Company. They are authorized to collect the outstanding debt from you and is not authorized to sue you for bankruptcy. For more information on Debt Collection Company - read more on
https://www.comparehero.my/blog/deal-debt-collector
3) EPF account is creditor proof as long as it remains in EPF. But once you withdraw from EPF account - then that money is no longer creditor proof. A Bankrupt may not withdraw money from EPF without DGI written approval. If you nominate a Beneficiary (EPF), your Beneficiary is not authorize to withdraw money from your EPF Account. All EPF proceeds (upon your death or total permanent disability) will be payable to YOUR Nominated Beneficiary. Your Creditor does not have a legitimate claim to EPF proceed payable to your Beneficiary.
Dear Pak Deh,
ReplyDeleteYou mentioned in the article that a bankrupt needs the DGI's consent to purchase an insurance policy.
With due respect, may I inquire whether it is stated in the relevant statute/rules or is it an unwritten rule practiced by the DGI?
Thank you.
Hi - When a person becomes a bankrupt in law everything he owns (including his insurance policies) becomes the property of the Official Assignee. He cannot buy an insurance policy without the permission of the Official Assignee. The Official Assignee can and may give permission to a Bankrupt to buy a reasonable protection policy (i.e. a Term Policy) for the benefit of the bankrupt’s family. This permission has to be given in writing.
ReplyDeleteThank you for your prompt reply dear Pak Deh.
DeleteAs the insurer is repudiating my relative's policy based on the ground that there was no written permission by the DGI, is there any written rule stating that there must be a written consent?
If there is none, then there might be a chance for my relative to rebut the said repudiation.
Thank you.
Hi - the underwriter of life insurer in Malaysia is rather conservative in regard to underwriting application from a Bankrupt. The bottom-line is that most life insurer is concern that a Bankrupt may not be able to pay the premium. However you can easily circumvent this by applying the life insurance using a third party applicant. Example - the spouse or family member (children) with insurable interest (to the bankrupt) may apply life insurance on the life of the Bankrupt. The owner of the policy is the applicant (spouse/children). The owner may nominate the beneficiary (spouse/children). Applicant (or anyone) can pay the premium. In this scenario - you need not require DGI permission to insure a Bankrupt.
DeleteIs an overseas bankruptcy constitutes an act of bankruptcy in malaysia?
ReplyDeleteas Section 3(1) of the bankruptcy act 1967 mentioned
A debtor commits an act of bankruptcy in each of the
following cases:
if in Malaysia or elsewhere he makes a conveyance or
assignment of his property to a trustee or trustees for the
benefit of his creditors generally
Hi - Malaysia’s insolvency procedures do not discriminate between local and foreign creditors barring certain provisions in the Exchange Control Act 1953. The latter requires foreign creditors to obtain the permission of the Controller of Exchange Control in repatriating the monies once their claim is satisfied. Permission is easily obtained and granted as a matter of formality. Acts of bankruptcy under Section 3(1) include situations where the debtor gives notice to any of his creditors that he has suspended or that he is about to suspend payment of his debts,
Deleteand where a creditor has served a bankruptcy notice on the debtor, and the debtor does not comply with the said notice.
but s3(1) does not apply to foreign creditors right?
Deleteand exchange control act do not give the power automatically turn the debtor bankrupt in Malaysia, if he already in bankruptcy oversea right?
Dear Pak Deh,
ReplyDeleteI just wan to inquire on what would happen to the debts of a deceased bankrupt ?
Most Malaysian assumes that when a bankrupt passed-away, the debts are automatically wiped out. This is never the case. The deceased bankrupt still owes debts to his or her creditor as long as he or she has not been officially granted a discharge from bankruptcy. It is therefore important to understand that when a bankrupt debtor dies his or her debts are not passed on to their survivors or heirs, unless the deceased bankrupt’s debts were joint. You are only liable for debts you have contractually agreed to pay and actually signed for. The survivors or heirs cannot be held liable for anyone’s debts regardless of marriage. However do take note that the deceased bankrupt’s debts do still have certain consequences for their survivors, and heirs.
DeleteHi Pak Den
ReplyDeleteMy wife is under bankrupt now and been paying a sum
of 100rm per month close to 2 years(54K owed) and
She just turned 55.
Q1. IF money left at her EPF can creditors get to it?
Q2. At the moment money frozen nearing 33k should i just nego with creditors now or just wait for another 1 1/2 years
and get a better deal, just your opinion)
Hi Dilemma - money in EPF account is creditor proof. Money withdrawn from EPF is not creditor proof. Personally - I will not with draw EPF money because its not creditor proof. Please take note that a Bankrupt must negotiate with the appointed Administrator (and must not with the Creditor) for any "deal".
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ReplyDeleteHI Pak Deh,
ReplyDeleteMy late uncle passed away in July 2017 and he is a bankruptcy. He doesn't have any assets except EPF. Unfortunately he didn't have nominee in his EPF account. So his wife wanted to withdraw his EPF money by submitting the Letter of Administration. Before that, does she needs to get a discharge letter from the Insolvency?
Apparently, she did request from Insolvency on Aug 2017 and was asked to follow up half year later. So now it is already 8 months and we tried to follow up with them. They told us they couldn't trace the file & etc and we have been follow up numerous times and the phone is very difficult to get through.
My aunt has received letter from KWSP saying that the application is "Lulus" and asked to submit LA letter.
My question is whether can we proceed to withdraw the EPF without getting the discharge letter from Insolvency? Or it is better to get the discharge letter before we withdraw the EPF?
Please advise. TQ
Hi Maiden - One of the role of the Administrator is to ensure that all the deceased debts are paid before it issue the Letter of Administration.
DeleteThanks Pak Deh. which mean we need to get the discharge letter 1st before doing LA?
DeleteHi Maiden - the Administrator will identify all assets and liabilities of the deceased bankrupt plus ensure that all debts (of the deceased bankrupt) are cleared. Once the Administrator have completed this task - the Administrator will issue the family member a Letter Of Administration. The family member then uses the LA to apply for the Letter Of Discharge from DGI.
DeleteHi pak deh, im facing bankruptcy and currently living overseas. Im considering to surrender my malaysian nationality and make epf withdrawals through foreign demand draft. What are my chances of getting my epf withdrawals? Thank you for your kind advise.
ReplyDeleteNemo Nguyen - if you give up on Malaysian citizenship, you may apply for EPF withdrawal. You have to provide evidence to EPF that you have migrated (given up Malaysian citizenship). It is preferred that you visit EPF office on this matter (especially on your request for "foreign demand draft"). There are many EPF branches now and it is very efficient.
DeleteThank you pak deh for your kind reply. But will epf issue the foreign demand draft to DGI instead of to met
ReplyDeleteHi Nemo Nguyen - are you facing bankruptcy or are you a bankrupt? If you are a bankrupt - you will need DGI approval to withdraw fund from EPF.
DeleteHi Pak Deh,
ReplyDeletei've urgent question would like to seek from your advice, mind giving me ur email so that we can get in touch. Thank you.
HI. want to know for knowledge,
ReplyDelete1) if i declared as a bankcrupty can they get my jointed name hse with my wife? (we jointly bought the hse 3yrs ago, still under loan with bank}
2) will my wife hse (her own hse bought 20 yrs ago )and her cash bank account affected? (she has her own saving since she had worked for many years last time , she a hsewife now for 8yrs)
thks
Hi - technically DGI can sell the house (joint-ownership) but in reality - it would be impossible to sell the house because no buyer (sane buyer) would want to own the house with your wife as co-owner. All assets that belongs to your wife (exclusively) will not be affected by your bankruptcy.
DeleteHi Pak Deh
ReplyDeleteI am a director of a SDN BHD company, if the company go
bankrupt will my personal assets be affected?
Thks
Hi - ff you’re a Sendirian Berhad company’s director whose business heading for insolvency, you will not be held responsible for your company’s debt. One of the main reasons people form a Sendirian Berhad, is to limit their liability for company debts.
DeleteHowever, there are some circumstances in which you can be held personally liable for these debts.
A: If you've signed a personal guarantee
B: If, knowing the company is insolvent, you've continued to prioritise shareholders over creditors
C: If you've disposed of company assets below their market value or for free
D: If you've overpaid yourself from the company account, creating an overdrawn director's loan
E: If you have raised funds to repay creditors via fraudulent means, i.e. obtaining finance via inaccurate information, or accepting money for goods which you know won't be delivered
Hi Pak Deh
ReplyDeleteI have few question on bankruptcy.
i have been declared bankrupt, but i still have a existing housing loan. the house is not fully built yet. Bank have disbursed 70% of loan balance 30% not fully disbursed yet as not to final stages yet. .But now i bankrupt do you think the bank will still disburse loan to developer when final stages is built.
could i still pay instalment to bank as i still wish to keep the house. but afraid insovensi will repossession it later when fully built.
Hi En Ishak - As long as the bank receives payment (installments & fees etc) of your housing loan on time, it has no legal ground to break the loan agreement and will continue to disburse the remaining balance of the loan. DGI will appoint an Administrator to manage your financial matter. The Administrator will review all your assets (including your house) to repay your debts. I recommend you discuss with the Administrator should you want to keep the house. There are cases where the Administrator allowed the Bankrupt to retain the house and yet at the same time satisfying the demands from the creditor. The bottom-line is rescheduling repayments that is mutually acceptable to creditors and you.
DeleteHi Pak Deh,
ReplyDeleteWhat if a bankrupt receives insurance n epf proceeds from husband's death, will it be taken by DGI?
If the husband can proof that the ins premium is paid by him for the wife who is going to be a bankrupt, will the policy cash value be taken by DGI.
DeleteNote: Policy owner and life insured is under wife.
Hi - All insurance proceeds & EPF money paid to a Bankrupt - is considered the assets of the Bankrupt and is subject to recovery of debts by DGI. I strongly suggest you rename your "Beneficiary & Policyowner" for your life insurance plus rename "Beneficiary" for your EPF. Find a person that is not a bankrupt.
DeleteHi - with reference to the cash value of a life insurance policy. Cash value of a life insurance policy is an asset of a Bankrupt and technically is subject to DGI recovery of debt regardless of Husband (or any party) paying the premium. However - in real life DGI normally does not seek to recover debts from policy cash value. I will recommend - your wife (going to be bankrupt) name you as the "Policyowner". Then this policy is no longer a property (asset) of your wife and the policy cash value cannot be recovered by DGI (if she is declared a bankrupt).
DeleteHi Pak Deh
ReplyDeleteMay i know a could a bankrupt be authorize to collect company cheque book on behalf for a company.
Hi En Ishak - a bankrupt should have no problem collecting company cheque book (on behalf for a company).
DeleteThank you Pak Deh on your information
ReplyDeleteHi Pak Deh ,
ReplyDeleteJust want to check, if you have been declared bankrupt, how do you go about making a withdrawal of EPF ?
Hi - a bankrupt need a written approval from DGI to withdraw money from EPF. However this action is not advisable as creditor has access to money withdrawn from EPF. For further information - please read - https://www.thestar.com.my/opinion/letters/2015/02/03/no-epf-withdrawals-to-clear-bankruptcies/
DeleteHi Pak Deh,
ReplyDeleteMy aunt is a bankrupt and she just turned 56. She checked with KWSP regarding withdrawing money and was advised that it can be done and they can issue cashier cheques to her name. She has withdrawn some money a few times and the last time she went, she was asked to signed a document to agree to hand over the cash to DGI. as the letter was in BM, she missed the part about handing over the cash to DGI. What is the worse case scenario here? She is worried if there will be a jail term, etc. Would really appreciate your advise here. Thank you very much.
Hi - It is highly unusual for a Bankrupt to withdraw money from EPF without the written approval of DGI. Although EPF specified that the money must be handed to DGI, it does not specify the penalty if the money is not handed to DGI. I also doubt EPF will take any action to recover the money or demand jail term. However, in the event DGI discovers this withdrawal, it may seek to recover the money from your Aunt. Practically, it would be extremely difficult for DGI to recover the money - if the money have been paid or handover to a third party. The key role of DGI is to manage a Bankrupt's financial matter and assist creditor recovers outstanding debts. However there are many cases where EPF money is critical to a Bankrupt's day to day living expenses, then DGI may not seek to recover money from a bankrupt's EPF to pay off debts (please note that this action is not an absolute rule). In addition, DGI is more keen to take action only on extreme cases, example, where the debt amount is substantial & where the Bankrupt blatantly abuse the rules to avoid paying his/her debts
DeleteThank you Pak Deh. My aunt is really relieved to know this. apparently she did check with the Insolvency Dept and was told that EPF money is 'safe' and that Insolvency Dept cannot touch that money. and she also checked with EPF before withdrawal and was told that the money is hers and all they need is just a declaration of her status which she got online. so she really didn't know that she was breaking any rules. Thank you again. Aunt can sleep well now :)
ReplyDeleteCan a bankrupt file mutual divorce petition without the sanction of DGI where there is no property involved?
ReplyDeleteHi Crystal Lim - DGI has no jurisdiction over divorce matter. In joint-property - DGI would normally seek to recover debt from the partner (who is bankrupt).
DeleteIf husband bankruptcy ,can ask wife to be owner, husband to be life assured? No problem with this?
ReplyDeleteAny disadvantage?
Hi - No problem for bankrupt Husband (insured) to appoint wife as policy-owner. The policy-owner have all rights to the policy, example, to surrender policy, take policy loan, reduce/increase sum assured etc. Once the ownership is transferred, the Husband losses all rights of the policy.
DeleteDear Sir,
ReplyDeleteI have been served with a Hearing of Creditor's Petition and they will enter Adjusdication Order and Receiving Order against me if I do not attend court on that day. My question is how long will it take for them to declare me a bankruptcy.
Hi - there is no fixed timeline depending on multiple factor affecting the process. More importantly, It would be beneficial to understand the whole process leading to bankruptcy. You can then strategize & take appropriate action to your advantage. Read more on the following site:- https://asklegal.my/p/how-does-bankruptcy-happen-in-malaysia-faq
DeleteHi Pak Deh,
ReplyDeleteWhat happens if a bankrupt has an overseas bank account which was opened for his child's education fees more than 5 years prior to his bankruptcy?
Thanking you in advance.
Hi - A Bankrupt is legally obliged to declare all his assets (including overseas) to DGI who then size control over his/her assets. However, sizing control of assets located overseas is a challenging and long process depending on any mutual assistance arrangement (with other country), cost of recovery, complexity, time, value of asset etc. In reality, many Bankrupt does not declare their overseas bank account or transfer money out.
DeleteHi Pak Deh，
ReplyDeleteI have been declared a bankrupt 3 years ago but I have yet to report to Insolvency。
My questions：
1. Will I be penalised if I report now?
2. I am still a Director of my company. Must I resign immediately?
3. I have a bank account which is still opened. Must I inform Insolvency?
4. I am driving a 17 years old Benz. Will it Be repossessed?
5. I owed the banks rm400k at the time of bankruptcy 3 years ago. Does interest still accrue if I have not report to Insolvency?
6. If I inherit anything from my parent, the money or property will go to Insolvency?
Your comments are highly appreciated.
Hi - (1) Once a person has been adjudged bankrupt by the court, he must attend to MdI's branch that administers his bankruptcy case. The branch that administers a bankrupt's case usually is the one nearest to the High Court where the bankruptcy order was made. Once he attends the branch, he will be required under the bankruptcy law to provide his details in a preliminary enquiries session, among others his full name, identification number, residential address, details on family members and causes of his bankruptcy. The bankrupt will also be required to file in Statement of Affairs which needs him to disclose his assets and liabilities to the DGI. (2) A Bankrupt cannot be company director unless agreed by DGI. I am unable to share on the penalty. (3) On bank account - DGI will review and advice you appropriately. Normally DGI will allow Bankrupt to own bank account(s) depending on the needs. (4) Technically DGI will seek to recover all assets. But asset (Mercedes 17 years old) that is of low value may not come under their radar. (5) Whatever you owe the bank will continue to accumulate interest. However most bank will normally take a haircut or write off the debt to close-off their book. (6) Any inheritance becomes your assets and is subject to recovery by DGI
DeleteHi Pak Deh , my house is joint name property with my husband.
ReplyDeleteI just got a refinance loan fully under my name.
In future if he become bankrupt... will DGI auction the house even I got 50% share and under a new loan single borrower ,thanks for your advise..
Hi - After bankruptcy is declared, the DGI has the authority to reverse any and all transfers backdating five years and two years if you have sold any property. For more information - please refer to http://www.starproperty.my/index.php/articles/property-news/bankruptcy-and-property-ownership/
DeleteWill DGI auction a joined name property when only the husband is bankrupt?
DeleteHi - technically DGI can recover the asset (joint-property) of a Bankrupt (husband) to repay the debt. However, in reality - it would be almost impossible to auction-off property where a Bankrupt is a co-owner.
DeleteDear Pak Deh,
ReplyDeleteI want to help my aunt write in to Insolvensi to get her release as she has been declared a bankrupt for more than 10 years already. Furthermore, she has been paying her monthly installments without fail. However the amount owing to the bank was more than rm10m. Can you advise how should I write the letter? Any advise would be most welcome. Thank you very much.
Hi - A Bankrupt can make an application to the DGI for a discharge under Section 33A of the Insolvency Act 1967. However, it can only be made if 5 years has lapsed from the date the bankruptcy order was made and some criteria imposed by the DGI in order to discharge the bankrupt. For more information - do visit this site:- http://www.mylawyer.com.my/bankruptcy-law-malaysia/discharge-of-bankruptcy/
DeleteHow does one apply to the DGI for discharge under Section 33A? Via write in of official letter to the DGI or are there any forms or procedures to be followed. Appreciate your advice.
DeleteHi - Making an application (write in) to the DGI for a discharge under section 33A of Bankruptcy Act 1967. Such application can only be made only if 5 years has lapsed from the date order was made upon satisfying some criteria imposed by the DGI for the exercise of his discretion. Among the factors that the DGI will take into consideration are the conduct of the bankrupt, the extent of his cooperation with DGI, the cause for bankruptcy, old age and infirmities etc.
DeleteHi Pak Deh,
ReplyDeleteI need your advise for such case. What if the bankrupt was one of the owner of the company which failed to pay employee epf/kwsp. The case was more than 24 years ago. And already got the clearance from DGI to discharge from bankrupt. We went to help our relative to do passport but was imformed by immigration, Kwsp side is still not clear (we aren't aware of this).
Is that possible to get Kwsp to help discharge from the ban list as the bankrupt is 70 years old already.
Hi Wei Ng - once a bankrupt is discharge by DGI, he should have no problem (with Immigration Department) to travel overseas. I suspect KWSP may have obtained a court order to ban your relative from travelling overseas and the status have not been updated. You should check & resolve this problem with with KWSP.
DeleteThanks Pak Dek, will check with Kwsp.
DeleteHello Pak Deh,
ReplyDeleteI understand that a bankrupt cannot leave the country. What if a foreign professional worker becomes a bankrupt and then subsequently loses his job and therefore has his work permit (which allows him to remain in Malaysia legally) terminated? Seems like any foreign worker could just use bankruptcy as a convenient way to legally stay in the country because the DGI won't let them leave.
Thanks
I have found that this site is very informative, interesting and very well written. keep up the nice high quality writing. Buyer bankrupcy insurance
ReplyDeleteSalam! May I know where to get the 2 years rules and 5 years rules information?
ReplyDeleteThanks!
This comment has been removed by the author.
ReplyDelete1.) No, debts are not inheritable. The assignment of the insurance policy to the son appears to be a form of fraudulent conveyance and if the DGI ever discovers the assignment, the assignment would be rolled back and the DGI would be the new assignee of the policy, since the policy was an asset of the bankrupt during his declaration of being one.
Delete2.) No. If the bankrupt declared a nominee for the policy prior to becoming a bankrupt, then the policy's cash value will be paid to the nominee; it is creditor proof, regardless if the DGI is the assignee or not, and the son would not be liable to repay the debt.
If the policy did not have a nominee, or declares a nominee after the owner of the policy became a bankrupt, that would be nullified by the DGI since the bankrupt would not have supposed to have had management rights over the policy after becoming a bankrupt.
Hi,
ReplyDeleteCan EPF savings proceed taken by creditors to set off the debts if the member is bankruptcy and his age is 55 years old?
The principal inside the EPF account itself cannot be garnished by any creditor, but the withdrawals by the bankrupt will be used to set off debts. If a bankrupt doesn't want their EPF to be garnished, they should (1) never make withdrawals from their EPF, and (2) they should nominate a natural person to be the beneficiary.
DeleteHi, thanks for your replies. Is it any Act stated or protected by any government bodies?
ReplyDeleteHi Pak Deh,
ReplyDeleteIs that possible for EPF to recover debt from employer's (director of company) EPF account after make him A Bankrupt person since he has failed to pay employee epf/kwsp??
The employer is below age of 55.. Now facing bankruptcy proceeding in court.
Please answer my question Pak Deh..
Hi - Employees Provident Fund (EPF) is creditor proof and cannot be claimed by the Director General of Insolvency (or any creditor), unless and until EPF pays any amount payable to you.
DeleteHi. Pakdeh i have a few questions to ask on bankruptcy.
ReplyDelete1. My current house property is under solely my wife name only as stated in the s&p agreement. But the property loan is under my wife and myself. Will the DGI auction the house if i am declared bankrupt?
2. I had transferred all my money to my wife name. Will DGI check my wife bank account and recover the money?
3. Will the bank withdraw the existing property facility if they know i am bankrupt? My wife will continue paying the monthly loan.
Thanks
Hi
ReplyDelete1: House belongs to your wife. DGI will have no access (right) to recover this house (in the event you are declared a bankrupt).
2: Under the Bankruptcy Act, any settlement or transfer of property shall be void against the Director General of Insolvency if the settler becomes a bankrupt within 2 years after the date of settlement. If the settlor becomes bankrupt within 5 years after the date of settlement, the settlement or transfer of property will be void unless the parties can show that the settlor was able to pay all his debts at the time of making the settlement without the aid of the property. The only exception is where (a) the settlement was made before or in consideration of marriage or (b) if the settlement was made to a purchaser in good faith and for valuable consideration.
3: As long as you and/or wife and/or any party - continues to service (pay) the loan - the Bank will be "Most happy" to retain the loan -even if you (or the Bank is aware) are declared a bankrupt.
Thanks for prompt reply. As for question 2. I has transferred all my cash in my bank account to my wife account. There is no asset transfer. Will the DGI check my wife bank account and query her where the cash come from?
DeleteUnder the new bankruptcy act, is it we are allow to request for bankruptcy discharge after 3 years of bankruptcy? If the bank doesn't allow during the 3rd year, then during the 5th years we are allow for automatic discharge?
Thanks
Hi - Cash is an asset. Appointed Trustee usually look at your bank transactions. The financial trail should lead to your wife's account. A Bankrupt must meet CT (Contribution Target) plus other conditions to be eligible for discharge within 3 years. For more information - you can visit this site - http://www.mdi.gov.my/index.php/faqs/bankruptcy
DeleteHi Pakdeh. I have been a bankrupt since 2010. My total loans due are approximately 70k multiple accounts with the largest being 33k.
ReplyDeleteWith the Covid19 situation I have lost my job and it's difficult to find a new one currently.
My question is, I have approximately 80k in my EPF 2nd account. And I intend to pursue my studies overseas. As a bankrupt, can I study abroad and can I perform from my EPF 2nd account to find my studies?
Hi - A Bankrupt requires DGI approval to withdraw fund from EPF. Take note that - once EPF fund is withdrawn, the fund will be "taken" by Administrator (appointed by DGI) and will be used to pay your Creditors. A Bankrupt requires DGI approval to travel overseas.
DeleteDear Pak Deh,
ReplyDeleteI’m facing a bankruptcy situation (not yet). Appreciate some enlightenment to the following:
1) Cash - clearing out my bank account via cash withdrawal before bankruptcy, DGI can’t trace right?
2) Property - sell at market value, is SPA necessary? Or is it preferred? Selling to the further relationship the better correct? Say selling to parents is better than to wife? Buyer can nego and restructure the loan with bank separately right?
3) Property - joint name, I read that you mentioned not likely to have buyer realistically, does it mean likely that DGI won’t touch it at all? Not even going to said property and vest and take away all valuables and assets? How safe should I feel with this? Or is it better to sell it with proper SPA, even if it’s selling to relatives?
4) Nulling bankruptcy - if my bankruptcy and inability to service loans is due to fraud/cheat cases, and the fraud case has another court case i’m pursuing, but the bankruptcy judgement comes earlier than fraud case judgment, later on can I use the fraud case judgment (I was cheated), to apply for nullification of bankruptcy? If yes, what is the success likelihood? Or in what condition/scenario is the fraud case judgment can help me in nullifying the bankruptcy judgment?
5) Auto discharge - 5 years from bankruptcy will auto discharge? Or subject to fulfill certain conditions? If yes, what conditions?
Many thanks!
Hi
Delete1: DGI should be able to trace cash (financial) trail and subsequently recover the cash. 2: DGI can recover property transacted 5 years before bankruptcy regardless of the price you sold, whom you sold too etc albeit it is challenging to recover such property. 3: DGI could recover the property in joint name but would face challenges to sell it off. 4: Nulling Bankruptcy - interesting question - best you discuss with your lawyer and/or DGI. 5: Auto Discharge - for more information - you can visit this site - http://www.mdi.gov.my/index.php/faqs/bankruptcy
Hai pak deh,
ReplyDeleteI get a job with collection agency, As compliance manager, anyhow they said they can't employ me due to my bankruptcy status. What should I do? Logically if I can't be employ, how am I going to pay the debt? Please advice
Hi - Many jobs are not affected at all if you go bankrupt. However, with some types of employment bankruptcy can have severe consequences, so it’s always important to check first (check with DGI). In some jobs, a record of bankruptcy may lead to dismissal, demotion or other issues. Some professional membership bodies don’t allow undischarged bankrupts to remain members.
DeleteHi Pak Deh, I bought a life insurance policy for my sibling who is bankrupt. I paid the policy premium but never informed insurance company about the bankrupt issue with regards to the policy holder. I am the beneficiary/nominee. I would like to ask in the event of the death of the policy holder whom is a bankrupt, will the insurance company pay to me. Also like to know whether DGI will stop Insurance Company to pay nominee/beneficiary or would claim back from nominee/beneficiary after Insurance Company make payment to nominee/beneficiary. Pls advise. Thank you so much.
ReplyDeleteHi - in the event of death - life insurance will pay the life insurance proceed to the nominated beneficiary. Creditor/DGI do not have access to this proceed. DGI does not have the jurisdiction to stop insurer from paying insurance proceed.
DeletePak Deh, Thank you for your prompt reply. DGI does not have the jurisdiction to stop insurer from paying insurance proceed. Can DGI recover the insurance proceed from the nominee a
ReplyDeletelater on as the insurance was bought after policy holder became bankrupt? I read article in your blog stating that bankrupt has to write to Official Assignee in order to purchase insurance. In this case, Official Assignee was not informed. I am rather confused. Please advise. Thank you very much.