News & Articles Frequently Asked Questions About Being Blacklisted
Frequently Asked Questions About Being Blacklisted
8 Dec 2015
It is common knowledge recently that the amount of people declaring bankruptcy are on the rise in this country due to many reasons and this has put a lot of misunderstanding and fear amongst members of the public.
Hence, there are plenty questions from members of the public regarding Bankruptcy, Insolvency and being blacklisted in CTOS or CCRIS. Here, we attempt to answer these questions as clearly as possible so that the layman can understand and act accordingly, as well as trying to clear up confusion regarding certain terminology.
Q: I’m a businessman whose business hasn’t been doing well recently. I haven’t been able to pay my loans for some time so I am afraid that I’ll be blacklisted. I’ve heard that I’ll be barred from travelling, lose all my belongings and even my passport. Is this true?
First things first, there are several different things you have brought up. Being blacklisted will not mean you lose your belongings and passport.
There are two credit data institutions in Malaysia, namely CTOS (Credit Tip-Off Service) and CCRIS (Central Credit Reference Information System) and they keep a record of your loans and your ability to repay them.
Being ‘blacklisted’ is merely a laymen term whereby if you decide to take more loans, CCRIS and CTOS will give the bank information that you still have lots of debts and can’t pay them, leading the banks to turn down your loan application. So in effect, you won’t be able to borrow any more money from legitimate financial institutions, making it appear that you are ‘blacklisted’
On the other hand, there is such a thing as you losing your passport and being barred from travelling. However, this only happens if you yourself file for bankruptcy through your lawyer to the courts. People usually file for bankruptcy to protect themselves from legal action. When bankruptcy is filed, your passport, company, belongings and assets have to be surrendered to someone called the DGI (Director General of Insolvency) who is the person in charge of selling off your property to settle your debt.
Q: Can I transfer all my property to save them from being sold by the DGI?
Some people believe that transferring all their assets to a family member or trusted associate prior to filing for bankruptcy can save them. However, this is not true as section 52(1) of the 1967 bankruptcy law states that any property transfer done two years before filing for bankruptcy immediately becomes null and void.
However if you transferred the property 5 years before being declared bankrupt, you can still maintain the transfer if you can prove to the DGI that he or she was financially stable and sound at that time and can pay back the debt without this property or asset.
However, if the transfer is not done to a close associate or family and is proven to be done to an unconcerned third party as a legitimate business deal, then the transfer is valid despite being done close to the bankruptcy declaration.
Hence, there are plenty questions from members of the public regarding Bankruptcy, Insolvency and being blacklisted in CTOS or CCRIS. Here, we attempt to answer these questions as clearly as possible so that the layman can understand and act accordingly, as well as trying to clear up confusion regarding certain terminology.
Q: I’m a businessman whose business hasn’t been doing well recently. I haven’t been able to pay my loans for some time so I am afraid that I’ll be blacklisted. I’ve heard that I’ll be barred from travelling, lose all my belongings and even my passport. Is this true?
First things first, there are several different things you have brought up. Being blacklisted will not mean you lose your belongings and passport.
There are two credit data institutions in Malaysia, namely CTOS (Credit Tip-Off Service) and CCRIS (Central Credit Reference Information System) and they keep a record of your loans and your ability to repay them.
Being ‘blacklisted’ is merely a laymen term whereby if you decide to take more loans, CCRIS and CTOS will give the bank information that you still have lots of debts and can’t pay them, leading the banks to turn down your loan application. So in effect, you won’t be able to borrow any more money from legitimate financial institutions, making it appear that you are ‘blacklisted’
On the other hand, there is such a thing as you losing your passport and being barred from travelling. However, this only happens if you yourself file for bankruptcy through your lawyer to the courts. People usually file for bankruptcy to protect themselves from legal action. When bankruptcy is filed, your passport, company, belongings and assets have to be surrendered to someone called the DGI (Director General of Insolvency) who is the person in charge of selling off your property to settle your debt.
Q: Can I transfer all my property to save them from being sold by the DGI?
Some people believe that transferring all their assets to a family member or trusted associate prior to filing for bankruptcy can save them. However, this is not true as section 52(1) of the 1967 bankruptcy law states that any property transfer done two years before filing for bankruptcy immediately becomes null and void.
However if you transferred the property 5 years before being declared bankrupt, you can still maintain the transfer if you can prove to the DGI that he or she was financially stable and sound at that time and can pay back the debt without this property or asset.
However, if the transfer is not done to a close associate or family and is proven to be done to an unconcerned third party as a legitimate business deal, then the transfer is valid despite being done close to the bankruptcy declaration.
Source: DurianProperty.com