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Tutorial 1 Question 2 Insolvency

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Shahrul Izham
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67 views2 pages

Tutorial 1 Question 2 Insolvency

Uploaded by

Shahrul Izham
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Question 2

Can a Judgment creditor issue a bankruptcy petition against the following persons?

(i) Siti, is an 18 year old student, pursuing a Foundation in Law course in one of the Malaysian
universities. She has been given a Supplementary credit card by her Mother to help meet her financial
needs. She has over the last 6 months incurred outstanding bills of RM36,000 ( or RM120,000) for
tuition fees, accommodation and lifestyle expenses.

Following section 5 of the Insolvency Act 1967, (i) of the section states that the creditor cannot present
a bankruptcy petition against the debtor when the amount is lesser that RM100,000.

In establishing so, the outstanding bill of RM36,000 is lesser than the amount stated in section 5 (i) of
the Insolvency Act. Thus, the creditor would not be able to issue a bankruptcy petition against Siti or
her mother. However, if the amount is RM120,000 the creditor would be able to issue a bankruptcy
petition as it fulfils the condition stated in section 5 of the Act.

(ii) Vlad Wallachia, is an officer at the embassy of Xanadu, and has been living in Kuala Lumpur since
September 2014. He enjoys the good life and often spends beyond his means. He has outstanding
credit card bills amounting to RM 56,000. (or RM156,000).

According to section 5 of the Insolvency Act 1967, (iv) of the section mentions that the debtor has to
either be domiciled in Malaysia or within a year of the petition the debtor is ordinarily resident or has
a dwelling house or place of business in Malaysia. Aside from that, the debt incurred has to be not less
that RM100,000 as stated in (i) of section 5 of the Act.

In applying so, Vlad, although an officer from the embassy of Xanadu, had already been living in
Malaysia since 2014 thus it had already been more than a year since Vlad had been living in Malaysia
which fulfils the condition stated in section 5 (iv) of the Act. However, the debt incurred is less that
the stated amount under (i) as it only amounts to RM56,000.

Therefore, the a bankruptcy petition could not be issued. However, if the amount is RM156,000 it
would fulfil section 5 (i) of the Act thus the bankruptcy petition could be issued against Vlad.

Section 5 (i) – the amount is less than RM100,000

(iii) Mrs. Cash, is a happily married young woman who loves collecting antiques. Recently she bought
a 15th. Century black lacquer painted chest for RM45,000 (or RM150,000) on 3 months credit, from
Antique Furnitures Sdn. Bhd. Contrary to the credit arrangements she has not paid for it to date.

Following section 5 of the Insolvency Act 1967, (i) of the section states that the creditor cannot present
a bankruptcy petition against the debtor when the amount is lesser that RM100,000.

In establishing so, the amount stated of RM45,000 is lesser than the amount stated in section 5 (i) of
the Insolvency Act. Thus, the creditor would not be able to issue a bankruptcy petition against Mrs
Cash. However, if the amount is RM150,000 the creditor would be able to issue a bankruptcy petition
as it fulfils the condition stated in section 5 of the Act.

(iv) Datuk Ta Da, a member of parliament for Tampin, bought a new car for RM300,000 and has not
been able to meet his car loan payments amounting to RM36,000 over the last 5 months.

In accordance to section 5 of the Insolvency Act 1967, (i) states that bankruptcy petition is not able to
be presented to the debtor if the amount is lesser than RM100,000.
In establishing so, the amount due by Datuk Ta Da is RM36,000 which is lesser than the amount stated
in section 5. Therefore, the creditor would not be able to issue a bankruptcy petition against Datuk Ta
Da.

(vi) Tok Sayang died on the 20 Sept. 2016 leaving unpaid debts in the sum of RM120,000.

Following section 5 of the Insolvency Act 1967, (i) states that the amount has to be at least RM100,000
for a creditor to issue a bankruptcy petition against the debtor. Aside from that, (ii) of the same section
states that the liquidated sum has to be payable immediately or at some certain future time.

Tok Sayang had incurred debt amounting to RM120,000 which fulfils the condition that it has to be at
least RM100,000. However, Tok Sayang had passed away before being able to fully pay the debt. This
would make the debt unable to be paid thus it does not fulfil the condition set out in section 5 (ii) of
the Act.

Therefore, the creditor would not be able to issue a bankruptcy petition against Tok Sayang.

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