adjudication order

Legal Definition of adjudication order

Further reading

Bankruptcy in Malaysia

Bankruptcy is a process where a debtor is declared a bankrupt pursuant to an Adjudication Order made by the High Court against the debtor if he is unable to pay his debts of at least RM50,000.

The High Courts of Malaysia makes a Receiving Order and Adjudication Order after a bankruptcy petition has been presented. It is usually presented either:

• by creditor's petition
  
  A creditor's petition may be presented only upon the commission of an act of bankruptcy (section 3(1) of the Bankruptcy Act 1967) by the debtor which must have taken place within six months prior to the presentation.
  
  To present a creditor's petition the debtor must be owing the petitioning creditor a debt of not less than RM50,000.
  
  
• by debtor's petition
  
  A debtor's petition is by itself an act of bankruptcy. The debtor's petition is presented by the debtor to make himself a bankrupt in order to protect himself from his creditors' claim that he knows he cannot satisfy. Unlike the creditor's petition, there is no requirement that a minimum amount of debt must be owed before a debtor's petition can be presented. After its presentation, a debtor's petition cannot be withdrawn without the leave of the court.
  
  The petition (Form 3 of Bankruptcy Rules 1969) is to be filed at the court of the State in which the debtor resides. Prior to the filing of the debtor's petition, the debtor must first deposit with the Director General of Insolvency (DGI) a sum of RM1,500 to cover the costs of administering the bankruptcy. The court will not accept the petition for filing unless the receipt of the Director General of Insolvency for the deposit is produced. A sealed copy of the debtor's petition must then be served on the Director General of Insolvency (DGI) by post or otherwise. On the hearing of the debtor’s petition, the Court will make a Receiving Order as well as an Adjudication Order. However, if the debtor is absent at the hearing, the petition may be dismissed.

Bankruptcy (Amendment) Act 2017

The new Bankruptcy (Amendment) Act 2017 [Act A1534] received the Royal Assent on 5 October 2017 and came into effect on 6 October 2017.

Under the new Bankruptcy Amendment Act:

• the receiving order and adjudication order are replaced by a single bankruptcy order;
• the minimum threshold for bankruptcy has been raised from RM30,000 to RM50,000;
• a creditor's petition is not allowed to be presented against a social guarantor.

The High Courts of Malaysia now makes a Bankruptcy Order, instead of the previous Receiving Order and Adjudication Order, after a bankruptcy petition has been presented.

Abbreviations

• AORO (Receiving Order and Adjudication Order) (bankruptcy, law)

Related terms

• receiving order
• adjudication
• bankruptcy