Bankruptcy Order & Effects

All property of the bankrupt shall:

No creditor shall have remedy against the property * become divisible among his creditors
/ commence any action except with leave of the * vest in the DG of Insolvency
court – s 8(1)(a).
– s 8(1)(b)

Bankruptcy Order: effects – s

8

Exception: The bankrupt shall file an affidavit in the office of

1. Secured creditor – may realize the security
within 12 months – s 8(2), (2A).
2. Employee of the bankrupt – s 31 Employment
Act 1955 – s 8(2).
the DG of Insolvency – partners, assets &
liabilities. – s 8(3).
The DG shall take possession of all books of
account, documents, etc relating to his property –
s 8(4).
 Disqualification of bankrupt – IA1967

disqualified from being appointed or

acting as a
Sessions Court Judge or
Magistrate or
from being nominated or elected to
or holding or exercising the office of
Councillor of a local authority – s 36
if a person is adjudged bankrupt
whilst holding the office of a Sessions
Court Judge, Magistrate, or a
Councillor of a local authority, his
office shall thereupon become vacant
– s 37
 • S 11(i)b Legal Profession Act 1976
where advocate and solicitor cannot
continue to enjoy the status of having
Disqualification a practising certificate once declared
of bankrupt - bankrupt.
Other legislation • Person adjudged bankrupt will also
be incompetent to be a trustee,
- examples commodity trading dealer or adviser,
futures trading dealer or company
liquidator.
Duties and Disabilities of bankrupt – s 38

 incompetent to maintain any action other than an action for damages in respect of an
injury to his person without prior sanction of the DGI
 once in every six months render to the DGI an account of all moneys and property
which have come to his hands for his own use during the preceding six months.
 must pay and make over to the DGI so much of the same moneys and property as
have not been expended in the necessary expenses of maintenance of himself and his
family.
 when the bankrupt receive any moneys, property or the value of which exceeds
RM500 and which does not form part of his usual income, he must immediately
report to the DGI of the receipt and must pay or make over the same as soon as may
be required by the DGI
Contd - Duties and Disabilities

 If there is any change of his home address, the bankrupt is under duty to immediately
inform the DGI
 shall not leave Malaysia without the previous permission of the DGI or of the court. A
sanction may only be given in every urgent matters including medical condition or
performing and with condition
 shall also not, except with the previous permission of the DGI or of the court, enter
into or carry on any business either alone or in partnership, or become a director of
any company or otherwise directly or indirectly take part in the management of any
company
 shall not, without permission of the DGI engage in the management of any business
or trade run by his wife, son, daughter or relatives.
Contd - Duties and Disabilities

the bankrupt shall also be subject to the power of the DGI to prevent
him from leaving Federation
DGI may by notice issued to any immigration officer request that a
bankrupt be prevented from leaving the Federation
List of undischarged bankrupt

• S 39 – list of undischarged bankrupt is kept by the DGI

• Available for inspection by public – DGI may issue a copy of the list to
requesting person.
• Name of deceased bankrupt is to be removed from the list 5 years after
the end of the administration of his estate.