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Tutorial Insolvency Group 1

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  LAW OF INSOLVENCY I TUTORIAL QUESTION 1  ISSUE ã Whether Maju Bank can proceed with bankruptcy proceeding against Brett Peet ?.  INTRODUCTION ã Bankruptcy happens when a person is unable to settle his debts (known as a debtor) owed to the people or party who loan him the money. ã Before filing a bankruptcy petition either by the debtor or creditor, the following criteria have to be met:  –  The sum involved is RM30,000 or more  – The sum of money must be ascertainable (liquidated sum)  – There is a default period of six months for the act of bankruptcy to have occurred  – Before the petition date, the debtor must have reside in Malaysia for at least one year  ã Generally, a person falls into bankruptcy due to several reasons. One of the reasons is acting as a guarantor. ã A guarantor can be a social guarantor or a corporate guarantor. ã  A corporate guarantor is a person who stood for loans relating to business loans, for example in a business partnership ã A guarantor is also liable to face bankruptcy when summoned by the creditors. The creditors will go after the borrower first and if that fails to recover the amount owed, they will go after the guarantor to settle the debts. ã A person who stood as a guarantor for loans like education, house, car hire purchase, scholarship and also third-party loans is known as a social guarantor.
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