Some info on the bankruptcy process.

 

When a debtor owes moneys to a creditor and does not pay him, the latter (creditor) may 
take the matter to court. If the creditor (plaintiff) is successful, he will eventually 
obtain a Judgement Order from the court. If the debtor (defendant) subsequently refuses or
is unable to settle the debt, one of the options of the creditor is to pursue bankruptcy
proceedings against him. 
There are phases to a bankruptcy process that one must go through before a person
is made a bankrupt. A bankruptcy action begins with a bankruptcy notice. However, 
the issuance of this notice does not mean a person is bankrupt. It only means that 
the person has to pay the amount demanded in the notice. If he fails to do so, he
 has committed what is known in law as an “act of bankruptcy”. After the act of 
bankruptcy is committed, the creditor will file for a petition of bankruptcy,
 known as a creditor’s petition. This must be filed within 6 months. In Malaysia, 
the law has been amended in 2020 to increase the minimum debt required for the 
presentation of a bankruptcy petition from RM 50 000 to RM 100 000 (for a period 
of one year). The creditor’s petition is a way of starting a hearing in court. 
Upon obtaining a hearing date, the creditor’s petition must be heard by the court.
Upon completion of the hearing process of the case, and if the court is convinced
that the person is to be declared a bankrupt, then the court will issue the
bankruptcy order. Only upon issuance of this order can a person be labelled as
a bankrupt.