{"id":61163,"date":"2024-02-02T21:27:08","date_gmt":"2024-02-02T13:27:08","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=61163"},"modified":"2024-02-14T17:01:35","modified_gmt":"2024-02-14T09:01:35","slug":"rebuild-credit-bankruptcy","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/rebuild-credit-bankruptcy","title":{"rendered":"How To Rebuild Your Credit After Bankruptcy"},"content":{"rendered":"

Everyone knows that going bankrupt is bad. As such, you will often hear plenty of advice on how to avoid going bankrupt in the first place. But what if you actually do go bankrupt? Are you now in complete financial ruin? Can you ever come back from such a state? Is your life over?\u00a0<\/span><\/p>\n

In Malaysia, it is a rather taboo subject that tends to be avoided. However, bankruptcy as a system is actually designed to try and help individuals or businesses to clear off their debt in an efficient manner and help them to gain a fresh start.<\/span><\/p>\n

<\/span>What is bankruptcy<\/b><\/span><\/h2>\n

By definition, bankruptcy is simply a legal process where individuals or businesses are declared unable to repay their outstanding debts. It involves the appointment of a bankruptcy trustee to administer the bankrupt\u2019s assets and distribute proceeds to creditors.<\/span><\/p>\n

In Malaysia a debtor must meet several conditions before being declared bankrupt:<\/span><\/p>\n

    \n
  1. The individual should be domiciled or have resided in or carried on business in Malaysia within one year before the date of presentation of the petition for bankruptcy.<\/span><\/li>\n
  2. The individual is unable to pay debts, which amount to a minimum of RM 50,000.<\/span><\/li>\n
  3. Six months have lapsed since the debtor committed an act of bankruptcy. An act of bankruptcy could include a declaration from the Court at the behest of the debtor that he is unable to pay his debts, or a judgement obtained against him which remains unsatisfied.<\/span><\/li>\n<\/ol>\n

    <\/span>How do you get out of bankruptcy<\/b><\/span><\/h2>\n

    There are only three ways to get yourself out of bankruptcy.<\/span><\/p>\n

    Pay off your debts in full<\/b><\/h3>\n

    If you pay off your debts, the records of you ever being bankrupt will be completely removed.<\/span><\/p>\n

    Discharge from bankruptcy by court<\/b><\/h3>\n

    It is possible to apply to the court to be discharged from bankruptcy. However, the Malaysian Department of Insolvency (MDI) would need to send in a report of your cooperation and good conduct with the department.<\/span><\/p>\n

    Discharge from bankruptcy by the MDI<\/b><\/h3>\n

    After three years, you can apply to be discharged by the MDI . But this would also depend on your cooperation with the department. Under certain circumstances, you may need to provide a written agreement with your creditor stating that you have come to an agreement on the terms of repayment of your debt.<\/span><\/p>\n

    <\/span>Benefits of bankruptcy<\/b><\/span><\/h2>\n

    Bankruptcy is often viewed as being an overwhelmingly negative state. However, there are some benefits to declaring bankruptcy. These include:<\/span><\/p>\n