Normally, once you are adjudged a bankrupt, you can apply to the official assignee for discharge via a proposition for settlement.
It is important to note that interest will no longer ‘run’ after you have been adjudged a bankrupt. Interest will only ‘run’ from the date you default and/or judgment in court entered against you until you are adjudged a bankrupt.
The correct procedure is to contact the bankruptcy office within the state where adjudicating order and receiving order was granted in favor of the creditor. Each state will have their own reference number.
E.g. you will not be allowed to attend the bankruptcy office in Penang if you are adjudged a bankrupt in Selangor.
The Bankruptcy office will then call for a ‘creditor’s meeting’ to request all the creditors (may be more than one) to attend the meeting as to whether it is agreeable to the bankrupt’s proposition settlement.
It is important to note that the settlement of 20% of the principle amount due and owing is sometimes acceptable by the relevant creditors.
The official assignee also has the authority to decide as to the proposition made by the bankrupt if it is found that the creditor is unreasonable or unable to locate the whereabouts of the creditors.
It is important to note that during the period when one is a bankrupt, he has to fill in a form known as ‘statement of affairs’ and if he is never evasive and genuine in his declaration, the official assignee can even agree to a discharge for ‘good behaviour’ and one do not have to pay even a cent.
The bankrupt cannot travel overseas unless the sanction from the official assignee has been obtained but normally these are not serious problems as normally official assignee will allow such request. The rationale is fear that the bankrupt may abscond the country.