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Bankruptcy issue...

 
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eddypun



Joined: 04 Jul 2005
Posts: 42

PostPosted: Wed Dec 21, 2005 12:23 am    Post subject: Bankruptcy issue... Reply with quote

Hi guys and gals...

Am helping out a close friend in this, so I really need good advice from the floor.

Correct me if I'm wrong, if a person transfers his properties to other people, and within 2 years he goes bankrupt, by right the property can be 'tarik balik' to be auctioned out.

HOWEVER, if a person knows that he owes the bank a lot of money, and wishes to declare himself bankrupt, is there a way to sell his existing property (which is still on loan) at a ridiculously below the market price (perhaps to his cousin), and leave the remainder of the loan unpaid - then declare bankrupt.

Will the law(yer) who is investigating this find out and take back the property from his cousin? Legally, the property has been sold.

Thanks for your advice. Is there anyone who can recommend a legal advisor or an accountant who has knowledge in this?
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goliath



Joined: 06 May 2005
Posts: 774

PostPosted: Wed Dec 21, 2005 11:59 am    Post subject: Reply with quote

eddypun wrote:


HOWEVER, if a person knows that he owes the bank a lot of money, and wishes to declare himself bankrupt, is there a way to sell his existing property (which is still on loan) at a ridiculously below the market price (perhaps to his cousin), and leave the remainder of the loan unpaid - then declare bankrupt.

Will the law(yer) who is investigating this find out and take back the property from his cousin? Legally, the property has been sold.

Thanks for your advice. Is there anyone who can recommend a legal advisor or an accountant who has knowledge in this?


Eddy...................how can u sell ur property without settling ur loan first?
the bank is also smart.................the property is the collateral and if u sell it off u has to settle first before they consent to the transfer.................this is covered in the 'power of attorney' document where u assigned ur rights to prop title and interest to the bank.

Btw u can PM Noor713...............our resident lawyer. Very Happy
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eddypun



Joined: 04 Jul 2005
Posts: 42

PostPosted: Wed Dec 21, 2005 8:06 pm    Post subject: Reply with quote

Hi,

Thanks for the eye-opener. True enough, the bank will not allow the transfer if it's not paid up yet.

However, once the bankruptcy petition is filed, and the property goes for auction, then it doesn't matter how low is the property sold, rights? As long as the property is sold? Then, the balance of the unpaid loan will be still in debt, until the person sued for bankrupt can repay the loan eventually?
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goliath



Joined: 06 May 2005
Posts: 774

PostPosted: Wed Dec 21, 2005 8:21 pm    Post subject: Reply with quote

yup................however the sale will be based on the auctioned value rather than
Quote:
HOWEVER, if a person knows that he owes the bank a lot of money, and wishes to declare himself bankrupt, is there a way to sell his existing property (which is still on loan) at a ridiculously below the market price (perhaps to his cousin), and leave the remainder of the loan unpaid - then declare bankrupt.

.................unless u has a way to deny others from the auction................and normally the bank will set a higher reserved price on their first attempt to recover the loan.

Btw it is only fair to the borrower that the bank gave their best effort to realise as much as they can for the collateral thus minimising the amount outstanding.
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eddypun



Joined: 04 Jul 2005
Posts: 42

PostPosted: Thu Dec 22, 2005 12:55 am    Post subject: Reply with quote

Thanks, goliath.

Very useful info.
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