If someone who has officially declared that he cannot settle the amount that he owes then he will be considered as bankrupt. In Malaysia, the minimum amount of judgment debt amount to declare bankruptcy is MYR30, 000.
There will have 6 months for you to make full settlement or negotiation after the bankruptcy notice is issued. If you did not response, you have committed an act of bankruptcy.
They may take out a judgment debtor summon, you will be cross-examined on your income and expenditure and the court can decide how your ability to pay up by monthly installments. If you don’t go to court, a warrant of arrest can be issued against you.
Reason of Bankruptcy:
Inability of Loan Settlement
There are various loans available such as personal loans, education loans, housing loans and car loan. This is the most common issue in each country.
Acting As a Guarantor
A person who acts as a guarantor for loans like education, house, car and business loan may face bankruptcy when summoned by the creditors. Once the borrower fails to pay up the amount owed, they will go after the guarantor to settle the debts.