Obtaining a judgment against a debtor is only part of the process, enforcing that judgment is the crucial next step to actually recovering the money owed. As an experienced debt recovery law firm, we regularly assist clients in Kuala Lumpur, Selangor, and throughout Malaysia with post-judgment enforcement strategies that are legally sound and commercially effective.
This article outlines the main enforcement mechanisms available under Malaysian law once judgment has been granted, whether by default, summary judgment, or after trial.
- Writ of Seizure and Sale (WSS)
A Writ of Seizure and Sale is one of the most direct methods of enforcement. It authorises the court bailiff to seize movable or immovable property of the judgment debtor and sell them at public auction to satisfy the judgment sum.
This method is often used when the debtor owns assets such as vehicles, machinery, or land.
- Garnishee Proceedings
If the judgment debtor holds money in a bank account or is owed money by a third party, garnishee proceedings can be initiated. The court may order the bank (or third party) to pay the owed sum directly to the judgment creditor instead of the debtor.
This method is particularly effective in commercial debt matters where liquidity exists. As a debt recovery law firm, we frequently utilise garnishee proceedings to help clients secure swift and direct payment.
- Judgment Debtor Summons (JDS)
A Judgment Debtor Summons compels the debtor to appear in Court and explain their financial circumstances under oath.
If the debtor fails to attend Court, the Court may order for their arrest and production before the Court for examination. If the debtor fails to pay according to the terms of the court order and no sufficient cause is shown, or the judgment debtor chooses to ignore the order, it constitutes contempt of court. An Order of Commitment may be made to commit the debtor to civil prison for a period of up to six (6) weeks or until earlier payment is made.
While this method does not guarantee immediate recovery, it often exerts significant pressure on the debtor to settle the debt.
- Bankruptcy Proceedings (for Individual Debtors)
If the judgment sum exceeds RM100,000, bankruptcy proceedings may be inititated against an individual debtor. Prior to this, a Notice pursuant to Section 3 (1)(i) of the Insolvency Act 1967 must be served, giving the debtor 7 days to respond.
A bankruptcy notice can be set aside on various grounds, especially where there are procedural defects. As bankruptcy proceedings are quasi-penal in nature, courts require strict compliance with procedural requirements. Therefore, a properly drafted bankruptcy notice is critical.
Upon the expiry of the 7-day period without response or opposition, the creditor may file a Creditor’s Petition. Once a bankruptcy order is made, the debtor’s assets vest in the Director General of Insolvency (DGI), who will realise and distribute the assets to creditors who have filed valid proof of debt.
We guide clients through the procedural and evidentiary requirements for bankruptcy to ensure full compliance with the law.
- Winding-Up Proceedings (for Corporate Debtors)
For corporate debtors owing RM50,000 or more, a winding-up petition may be filed. This process begins with service of a statutory notice of demand pursuant to Section 466 of the Companies Act 2016. If the company fails to pay within 21 days, the creditor may proceed to file the petition.
If the company fails to show a bona fide dispute of the debt, the Court is likely to grant a winding-up order. Once granted, a liquidator will be appointed to take over the company’s operations, realise its assets, and distribute the proceeds to the creditors.
Conclusion
Winning a case is not the end, it’s the enforcement that secures results. As a trusted corporate and commercial law firm and debt recovery law firm in Malaysia, we provide end-to-end support to ensure your judgment leads to actual recovery.
If you need advice on any aspect of post-judgment enforcement, contact us today for a consultation. We also offer legal retainer packages tailored to businesses in Malaysia seeking structured legal support.
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