Debt Recovery in Malaysia – The Enforcement of Judgement
As mentioned in Part II of Debt Recovery in Malaysia, the fact that you successfully obtain a judgment in favour of you does not mean that your money is recovered. Your debtor may continue eliciting the payment of the debt.
In such a situation, you may apply to the Court for the enforcement of a judgment against your debtor. There are various methods of enforcement of a judgment.
1) Bankruptcy Proceedings / Winding-up Proceedings
In the situation where your debtor is an individual, and the judgment sum is RM50,000.00 or more, you may opt to file a petition to make the debtor a bankrupt.
In the situation where your debtor is a company, and the total debt sum is RM10,000.00 or more, you may opt to file a petition to wind up the debtor.
This is the most common and threatening forms of enforcing a judgment as it puts a lot of pressure on your debtor to pay the judgment sum to avoid to be declared as a bankrupt. However, making your debtor bankrupt does not mean that you will automatically get back your money. The Director General of Insolvency (DGI) will call for meetings and asses the debtor’s means of repaying the debts, and it is usually a long process. Further, in relation to the distribution among the other creditors, the priority will be given to the secured creditors, such as banks.
2) Judgment Debtors Summons (“JDS”)
This is an application which you can use for discovery of information on the assets and financial means of the judgment debtor. The judgment debtor will be called to appear in front of the Court.
At the end of the process, the Court can order the judgment debtor to pay the judgment sum either in one lump sum or instalments.
In the situation where the debtor fails to comply with the Court order, the debtor will be called upon again to show cause why he should not be imprisoned.
3) Garnishee Proceedings
This may be applied to attach monies owed from a Judgment Debtor’s bank (“the Garnishee”) to satisfy the sum due, provided that:-
- the garnishee is within the jurisdiction; and
- the sum is exactly as stated on the judgment.
The Court will order the judgment debtor’s banks to attach any amount in the judgment debtor’s bank account to satisfy the judgment debt owed to the judgment creditor.
There are two stages:
- The judgment creditor may obtain an order to attach/freeze the judgment debtor’s bank account.
- The Court will order the Bank to remit the monies in the account to the judgment creditor to satisfy the judgment.
4) Writ of Seizure and Sale (“WSS”)
This is an application applicable to movable properties. The Court will command the Sheriff or Bailiff to seize and sell of the property of the judgment debtor to satisfy the judgment sum due. Nevertheless, under Section 3 of the Debtor Act 1957, essential life items such as clothes and cooking vessels, are prohibited from being attached.
The above-discussed methods to enforce the judgment are the methods which are commonly used. However, there are other methods to enforce the judgment which are not discussed here. Thus, you should consult your lawyer before you make your decision on which methods to be used for your situation.
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