Enforcing a judgment

First steps

• Serve the sealed judgment on the debtor and ask for payment. Many debtors pay at this stage or propose instalments.
• Find out what the debtor owns: land (search at the Land Office), vehicles, bank accounts, shares, a business, money owed to them by others.
• You can ask the court to order the debtor to attend and be examined on oath about their assets and debts (Order 48 of the Rules of Court 2012).
• Enforcement generally needs no permission of the court within 6 years from the judgment; after 6 years, you need the court's leave to issue a writ of execution (Order 46 rule 2). An action on a judgment itself is barred after 12 years (Limitation Act 1953, s 6(3)).

Writ of seizure and sale

A writ of seizure and sale (writ penyitaan dan penjualan) lets a court bailiff seize the debtor's movable property (such as vehicles, furniture or goods) and sell it by public auction, with the proceeds going towards the debt. A separate procedure applies to land and buildings, which are usually sold by public auction after a court order.

• A writ of execution is valid for 12 months from the date it is issued, and can be renewed by the court (Order 46 rule 6).
• Some items cannot be seized, such as basic necessities and tools of trade, within limits set by law.
• Seizure and sale costs money (bailiff, storage, auction fees), so check first that the debtor has property worth seizing.

Garnishee proceedings

A garnishee order (perintah garnisi) (Order 49) directs a third party who owes money to the debtor – most often the debtor's bank – to pay that money to you instead. It is done in two stages: first a garnishee order to show cause, which freezes the money, and then a hearing at which the order may be made absolute so the money is paid out. Certain money, such as some types of salary and statutory funds, may be protected from garnishment.

Judgment debtor summons

A judgment debtor summons (saman penghutang penghakiman, JDS) is issued under the Debtors Act 1957 and Order 74 of the Rules of Court 2012. The debtor must come to court to be examined about their means. The court can then order the debt to be paid in instalments. If the debtor has the means but wilfully refuses to pay, the court can, as a last resort, commit them to prison for a limited period. Committal does not wipe out the debt.

In small claims, a simplified version (a notice to show cause in Form 208) is used.

Bankruptcy (individuals)

If an individual owes you a liquidated (fixed) sum of at least RM100,000, you may be able to make them bankrupt under the Insolvency Act 1967. This threshold was raised from RM50,000 by the Insolvency (Amendment) Act 2020, with effect from 1 September 2021 (section 5(1)(a)). The Minister now has power to vary the amount by order in special circumstances.

The process generally runs: a bankruptcy notice is served demanding payment; if the debtor fails to pay or settle, that is an act of bankruptcy; the creditor then files a creditor's petition in the High Court within the time allowed. If a bankruptcy order is made, the Director General of Insolvency (Jabatan Insolvensi Malaysia) takes control of the bankrupt's property for the benefit of all creditors.

Bankruptcy has serious consequences for the debtor (for example, travel restrictions and limits on running a business). Since 2023 amendments, there are wider routes to discharge, including automatic discharge after a period for those who meet the conditions. Debtors facing a bankruptcy notice should seek advice early – the Insolvency Department and the Credit Counselling and Debt Management Agency (AKPK) can help with information.

Winding-up (companies)

A company that cannot pay its debts can be wound up (penggulungan) by the High Court under the Companies Act 2016. Under section 466(1)(a), a company is deemed unable to pay its debts if a creditor owed more than the prescribed amount serves a written notice of demand at the company's registered office and the company fails to pay, secure or compound the debt within 21 days.

The prescribed amount was RM10,000 when the Act came into force. It was raised temporarily during COVID-19 and, by a ministerial order, set at more than RM50,000 from 1 April 2021. Check the current figure before relying on it.

Winding-up is a drastic remedy that ends the company's business. It is not meant for debts that are genuinely disputed – a company can ask the court to stop a petition based on a disputed debt.

How long does it take?

There is no fixed timeline. A cooperative debtor may pay within weeks. Seizure and sale or garnishee proceedings commonly take a few months. Bankruptcy and winding-up take longer and cost more, and you will share the debtor's assets with other creditors. Weigh the cost of enforcement against the amount you are likely to recover, and consider a negotiated instalment plan.

If you are the debtor, do not ignore court papers: you may be able to negotiate instalments, apply to set aside an irregular judgment, or seek a stay. See Getting legal help.

Laws cited on this page

Listed automatically from the federal Acts named on this page. All laws of Malaysia →

Sources

• Rules of Court 2012, Orders 46, 48, 49, 74 (Malaysian Bar copy)
• Limitation Act 1953, s 6(3)
• Allen & Gledhill – Insolvency (Amendment) Act 2020 in effect from 1 September 2021
• The Vibes – Light at end of tunnel for insolvents under amended Act (2023)
• Mondaq – Debt threshold must exceed RM50,000 to file winding-up petition from 1 April 2021
• Malaysian Department of Insolvency (MdI)
• Conventus Law – Layman's guide to enforcement of judgments

Related

How a civil case runsSmall claims (RM5,000 and below)AppealsCourts and their powersGetting legal help