Q I BOUGHT a condominium in Penang more than 10 years ago with a loan of $200,000 from a bank in Malaysia.
Due to financial difficulties, I have not paid the monthly instalments for the past three years. During this time, I tried to sell the property but could not find a buyer. I asked the bank to auction the property but it has not done so.
The total interest and late charges are more than $100,000.
I also have another property in Johor Baru which I bought with a loan from the same bank. I have stopped paying the monthly instalments for more than a year.
I am only working part-time. I am a Malaysian and a permanent resident in Singapore.
I live in an HDB executive apartment with my wife and two children. I am 45 years old and my wife is working in Singapore. She is also a Singapore permanent resident.
Can the bank in Malaysia force-sell my HDB apartment? Can I continue to live in Singapore if I'm made a bankrupt?
Can I keep funds for my retirement in POSB? Can I freely travel to and from Malaysia?
A It appears that for both your properties in Penang and Johor Baru, the lenders, presumably the banks in Malaysia, would at some point seek to recoup their loans through the forced sale of these properties.
If there is a shortfall, they may mount legal proceedings against you.
If that happens and judgment is obtained, they may enforce the judgment against you in Singapore where you have assets.
A foreign judgment of a superior court may be enforced in Singapore, although a foreign judgment is not automatically enforceable.
If the foreign judgment is registered, that judgment has the same effect from the date of registration as if it had been a judgment originally obtained or entered in the High Court here.
The High Court would exercise its discretion on the basis of justice and convenience, and may refuse registration of the foreign judgment if the judgment was obtained by fraud, if an appeal is pending and so forth.
Even if the foreign judgment has been registered, you are entitled to challenge it.
It may be set aside if certain conditions, similar to those that would have prevented registration, are satisfied - for example, if it was obtained by fraud or if it is against public policy to allow it to be enforced.
If you are unable to pay your dues, you may be declared a bankrupt.
On a bankruptcy order being made, an HDB flat does not vest in the Official Assignee (OA) and in that sense, it is safe from the consequences of bankruptcy only if both the owners are Singapore citizens.
If the HDB flat is wholly or jointly owned by a permanent resident, as is your case, then the bankrupt's interest will vest in the OA as well.
The OA has a duty to call in the bankrupt's estate and hence may well decide that your flat has to be sold.
There is no express prohibition against a bankrupt operating or holding a bank account.
However, any credit balance in a bank account vests in the OA. In practice, the OA will tell bankrupts that they must apply to the OA before opening a bank account.
Banks will therefore ask to see such an authorisation letter from the OA.
If allowed to open a bank account, it is the duty of the bankrupt to provide the OA with whatever information may be required by the OA in respect of that account.
If he fails to do so, the bank account may be closed by the OA. You would also need the OA's consent to travel out of Singapore.
As a general rule, the restrictions on a bankrupt relate either to disqualifying him from holding certain positions, doing certain acts or affecting his legal capacity to do what an ordinary person could do.
Hence, these ought not to affect your ability to continue living in Singapore, but you should check this with the Immigration & Checkpoints Authority.
Amolat Singh
Lawyer
Amolat & Partners
