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View Full Version : Can a Bankrupt escape from other debts?



evelynlim
29-08-2006, 10:26 AM
I have a friend being sued for bankrutpcy by Bank A for bank loan defaulted. In the same time he is still paying for credit card bills from Bank B. We have advised him not to pay any more to Bank B and use whatever excess he has to pay back to all his friends & relative as afterall he is already a bankrupt regardless of which bank has made him bankrupt. His concern is that if he don't pay to Bank B then the bill amount & interest will be accumulative and become double/triple later, if he owes only to Bank A, he might be able to discharge himself as a bankrupt one day when he has the money instead of having to pay to both bank. Is there any catch or what is the consequences if he doesn't pay for the credit card bills and income tax when he was a bankrupt? Thanks for your advice.

mel&sun
29-08-2006, 10:32 AM
Get him to try settling his other debts also.. cos if not, it would mount up and he would have difficulties clearing it. Get him to also sit with bank A for out of court settlement. Sometimes, banks are lenient... work out a plan to repay debts to bank A. Don't go into bankruptcy.. kinda hard to get out of it.. you can't even get out of the country...

evelynlim
29-08-2006, 11:21 AM
Get him to try settling his other debts also.. cos if not, it would mount up and he would have difficulties clearing it. Get him to also sit with bank A for out of court settlement. Sometimes, banks are lenient... work out a plan to repay debts to bank A. Don't go into bankruptcy.. kinda hard to get out of it.. you can't even get out of the country...
Thanks. There is no way for him to repay the debts to bank A, he just can't afford it unless go for Ah Long(this will even worse). Being sued as a bankrupt is not a good thing but is the only solution when there is no other options. I don't think being a bankrupt is the end of the world for a person although can't travel oversea.

Bulldoggie
29-08-2006, 01:58 PM
How much debts accumulated or when will cause the bank to sue a person for bankruptcy?

evelynlim
29-08-2006, 03:11 PM
How much debts accumulated or when will cause the bank to sue a person for bankruptcy?

Under the Bankruptcy Act, a person may be sued for Bankruptcy for the debts owing plus interest amounted to RM30K or more. The debts that my friend owing is around RM250K+ caused by wrong desicion made for investment in the shop lot which can't be sold or rented out. After the bank has lelong the property still got so much to pay, thanks to the interest! :mad:

iml109
29-08-2006, 05:33 PM
My best advise is to refer to a lawyer. I am not sure if I remember correctly, but being sued for bankruptcy is not a total lost-lost situation. There are ways to settle this even in court, but u will lose certain rights (e.g. not allowed to hold any property at all, savings and such) for a period of time (again, iirc, 5 yrs??). Lawyer is the best option.

Sentinel
29-08-2006, 11:09 PM
If one were to be bankcrupt in the 80s or 90s, the social stigma was horrendous. But nowadays, some people chose the path to avoid paying the sums owed and to seek a breather to reorganising their finances and repayment. One can become a discharged bankcrupt and all your rights are restored.

In Singapore here, bankcrupts get automatically discharged after a certain period of years, whether or not they settled their previous outstandings, correct me if I am wrong. The rationale behind this was to ensure people don't pay with their entire life over one financial "mistake".

Bulldoggie
30-08-2006, 04:25 PM
Thanks for the info Evelynlim :)