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7 The Consequences of refusal of discharge of Bankrupt are set out in section 38 of the Bankruptcy Act as follows: 38(1) Where a bankrupt has not obtained his discharge- (a) the bankrupt shall be incompetent to maintain any action (other than an action for damages in respect of an injury to his person) without the previous sanction of the Director General of Insolvency; (b) the bankrupt shall once in every six months render to the Director General of Insolvency an account of all moneys and property which have come to his hands for his own use during the preceding six months, and shall pay and make over to the Director General of Insolvency so much of the same moneys and property as have not been expended in the necessary expenses of maintenance of himself and his family; (ba) notwithstanding paragraph (b), the bankrupt shall immediately report to the Director General of Insolvency the receipt of any moneys, property or proceeds in any form from property the value of which exceeds five hundred ringgit and which moneys, property or proceeds do not form part of his usual income and the bankrupt shall, as soon as may be required by the Director General of Insolvency, pay or make over such moneys, property or proceeds to the Director General of Insolvency; (bb) the bankrupt shall immediately inform the Director General of Insolvency if there is any change of his home address; (c) the bankrupt shall not leave Malaysia without the previous permission of the Director General of Insolvency or of the court; (d) the bankrupt shall not, except with the previous permission of the Director General of Insolvency or of the court, enter into or carry on any business either alone or in partnership, or become a director of any company or otherwise directly or indirectly take part in the management of any company; (e) the bankrupt shall not, except with the previous permission of the Director General of Insolvency or of the court, engage in the management or control of any business carried on by or on behalf of, or be in the employment of, any of the following persons, namely- (i) his spouse; (ii) a lineal ancestor or a lineal descendant of his or a spouse of such ancestor or descendant; or (iii) a sibling of his or a spouse of such sibling.
(1A) In granting permission under paragraph (1)(c), (d) or (e), the Director General of Insolvency or the court may impose such conditions as he or it may think fit.
(2) A bankrupt who makes default in performing or observing this section or a condition imposed pursuant to subsection (1A) shall be deemed guilty of a contempt of court, and shall be punished accordingly on the application of the Director General of Insolvency.
Generally a bankrupt may not be a company director and bank signatory, it will be embarrassing if the bankers should write a letter to inform the respective companies that cheques issued by a particular person is no longer valid.
In Malaysia, Bankruptcy proceedings are limited to personal bankruptcy.
36(2) The disqualifications to which a bankrupt is subject under this section shall be removed and cease if and when- (a) the adjudication of bankruptcy against him is annulled; or (b) he obtains from the court his discharge with a certificate to the effect that his bankruptcy was caused by misfortune without any misconduct on his part.