How To Enforce A Monetary Order?
What happens you manage to obtain a monetary order/judgment against a person who owes you money (i.e. a debtor) but he refuses to comply with the order/ judgment? Below is a quick guide on some of the things you can do (legally!) to secure your money.
Under this umbrella, the debtor will be hauled to court to decide if he can pay the judgment debt he owes you. However, it must be noted that you can only commence bankruptcy proceedings against the debtor if:
- The total judgment debt exceeds RM100,000.00 (as per the Insolvency (Amendment) Bill 2020);
- The debt is a liquidated sum;
- The order/judgment against the debtor has occurred within six months before the bankruptcy proceedings are commenced against the debtor; and
- The debtor resides in Malaysia/ has business in Malaysia (carried out personally or via an agent)/ member of a firm or partnership which has carried on business in Malaysia within one year before the bankruptcy proceedings are commenced against the debtor.
**Additionally, the Insolvency Bill also states that the Minister has the discretion to further amend the amount of debt stated in point 1 for a specific time period provided that the Minister is satisfied that there are special circumstances that warrant such amendment and that it is in the public interest to do so.
This order allows you to impose a charge on the debtor’s securities, such as the shares, bonds, or dividends that are owned by the debtor. Before a charging order is granted by the court:
- An order will be granted to prevent the debtor from disposing of his securities;
- The court will then determine as to why the order should not be granted to the you. If there are no reasons to the contrary, the court will grant the charging order.
It must be noted that the order can only be enforced after 6 months from the date of the first order mentioned above.
This an application made for the appointment of a receiver (by the court) to manage the income from the debtor’s assets to make payment to you so as to satisfy the judgment debt. It is not an automatic appointment- before a receiver is appointed by the court, the court will have to consider:
- Whether it is just or convenient that the appointment should be made;
- The amount you claimed;
- The amount likely to be obtained by the receiver;
- The cost of such appointment; and
- Any other relevant matters.
Judgment debtor summon
This is a form of summons issued by the court to compel the appearance of the debtor in court to determine how his assets (after inquiring about it) can be utilized to settle the judgment debt. Upon determination, the court can actually ask the debtor to either settle the judgment debt in one lump sum or by installment.
If the debtor does not show up in court after being served a summon, the court can actually:
- Order the debtor to be arrested and be brought to court to be examined;
- Make an order without his presence (i.e. an ex parte order) against him.
Writ of delivery
It is an application that, if granted, allows you (usually in a hire purchase scenario) to repossess any removable property to satisfy the judgment debt that is owed to you by the debtor.
Writ of possession
Similar to that of a writ of delivery, a writ of possession is an application which, if granted, enables a court’s sheriff to enter into the debtor’s land and take possession of the debtor’s immovable property and sell it (usually via an auction) to satisfy the judgment debt.
Generally speaking, there are two ways in which a company can be wind up, namely via a voluntary winding up or by way of a winding-up order made by the court.
Similar to that of a bankruptcy proceeding, a winding-up proceedings instead targets an entity/ company when the entity/company cannot pay its debt as and when it is due (in this case, where the company refuses to comply/ cannot pay the judgment debt). A company is deemed to be unable to pay its debt if:
- The company is indebted in a sum exceeding the amount as prescribed by the minister and a creditor by assignment/ when a notice of demand is served to the company to pay up its debts;
- An execution or other process has been issued based on a judgment/ order as per what we have discussed in this article; or
- The court is satisfied that the company is unable to pay its debt.
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