Debt Collection in Malaysia
Are you seeking help with debt collection in Malaysia? Oddcoll is here to ensure that you are paid promptly and smoothly by your Malaysian debtors. It can be disheartening when your international clients fail to settle their invoices. Traditional methods and pressures often prove ineffective. By launching your case with us in a few minutes, you’ll have a local Malaysian debt collection expert operating directly where your debtor is located. Straightforward, rapid, and efficient debt recovery in Malaysia.
How do I initiate debt collection in Malaysia?
Upload the unsettled Malaysian invoice onto our platform. Setting up your initial case and account takes less than a minute. When you upload your outstanding Malaysian invoice on our platform, the recovery process against your Malaysian debtor commences immediately. A Malaysian debt recovery expert, skilled in Malaysian debt recovery laws and business customs, will start applying pressure on your debtor locally in Malaysia. This expert will communicate with your debtor in their own language, enhancing the prospects of success.
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What is the cost of employing Oddcoll´s debt collection services in Malaysia?
Our fee structure is based on a success fee, implying that you will only pay if we manage to recover your claim. Our fee is 19.5% of the total amount retrieved, which means that you will retain 80.5% of the recovered sum. If we fail to retrieve any money, you will not be charged.
Usually, our debt recovery platform, Oddcoll, necessitates a membership fee; however, we offer a 30-day complimentary trial during which you can launch as many cases as you desire without any initial costs or risks. Contrarily, most other debt recovery services impose a substantial initial fee just to initiate a case.
We firmly believe in a joint effort towards the goal of recovering the money, and we are committed to earning money only if we are victorious. Our pricing model reflects this philosophy, and we endeavour to collaborate with all parties towards a successful outcome. For more information about our pricing, please refer to our pricing-page.
What debt recovery measures will you employ to recover the debt in Malaysia?
Numerous measures will be implemented. First and foremost, we will attempt to get your Malaysian client to pay during the amicable collection phase in Malaysia, without resorting to legal proceedings. This is facilitated by our understanding of Malaysian laws, regulations, and business customs. Actions executed can encompass:
Credit scoring
Contact
Pressure on the debtor
Negotiation
Home visits
Suitable legal channels and petitions
Insolvency procedures
Enforcement of claims.
How does my customer relationship get affected?
It won’t be. The steps we take always adhere to proper debt collection practices and we’re authorized to execute debt recovery actions in the pertinent jurisdiction. Our local specialists are well acquainted with Malaysian customs and know how to conduct themselves professionally, thus ensuring that your customer relationship is managed in the best possible manner.
How does the debt recovery process on your platform function once I have initiated my Malaysian debt collection case?
The process is quite uncomplicated:
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Simply upload your unpaid Malaysian invoice to our online portal.
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Our team begins the actions against your Malaysian debtor to recover the debt. You can track the progress on the platform through notifications when there are updates in your case.
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Once the debt has been successfully collected, the money is transferred to you.
(See how easy it is to get started – 55 sec!)
What are the chances of Oddcoll successfully recovering my claim in Malaysia?
Based on our past data, we have been successful in retrieving around 80% of our claims in Malaysia. However, the success rate can fluctuate depending on a variety of factors such as the debtor’s financial stability, the explicitness of payment obligations, and the age of the debt. In general, the earlier a case is advanced to debt collection, the higher the success rate.
How long does the debt recovery process generally take in Malaysia?
It’s tough to provide an exact timeframe as every case has its unique circumstances. Some cases can be resolved quickly if the debtor merely overlooked paying the debt, while others may necessitate more persuasion and pressure and could take longer. Nevertheless, we strive to advance the case as speedily as possible since we only receive payment upon successful recovery. It’s in the best interest of everyone to recover the full claim as promptly as possible. Be assured that we will work tirelessly to settle your case as efficiently as possible.
What kind of documentation does Oddcoll need to start the debt collection process in Malaysia?
Primarily, we need the unpaid invoice you’ve issued. If there’s additional documentation such as a signed contract or proof of delivery, this can be uploaded too. If further documentation is relevant, our debt collection expert will request it at the appropriate stage. Also, providing the debtor’s contact details, preferably with a summary of previous communication with them (if any), will be beneficial.
What legal actions can you undertake if it becomes necessary to pursue the claim legally in Malaysia?
We’re equipped to execute all types of legal actions. Further down the page, you’ll find a more comprehensive explanation of the legal collection process in Malaysia. In a nutshell, Oddcoll can aid you with the legal collection of undisputed claims (certain simplified legal procedures) and ordinary legal processes for disputed claims. We can also assist with the enforcement of an enforcement title and insolvency processes.
Do you accept all kinds of debts?
No, our specialty is B2B debt collection, meaning that we concentrate on recovering cross-border business debts. If you have a debt owed to you by a Malaysian company, we’re the right service for you.
Benefits of Using Oddcoll for Debt Collection in Malaysia
Our team is proficient in the subtleties of Malaysian business culture and regulations, offering a comprehensive debt recovery procedure.
With 24/7 access to our online portal, you can stay informed and current on your debt collection case at all times.
What if I have multiple unpaid claims from Malaysian debtors to upload?
There’s no need to worry. You have the flexibility to begin your cases by uploading them one at a time (which takes roughly a minute per case), via an Excel file, or by connecting your ERP system to our platform through API. We understand that every customer has distinct needs, and we strive to meet those needs in the most efficient way possible.
Do you provide debt collection services in countries other than Malaysia?
Yes, we do. As a global B2B debt collection service, we have a network of local debt collection specialists all over the world. You can confidently depend on Oddcoll for all your international debt collection requirements, and we will work diligently to help you recover the money owed to you, no matter where the debtor is located.
What is Oddcoll?
We know how difficult it can be to get a customer abroad to pay. As a creditor in another country, you have no leverage.
We have solved this problem by creating an international debt collection platform with the best local debt collection agencies and law firms around the world.
This means that when you create a case with us, a local debt collection specialist will work on your case, no matter where in the world your debtor are located.
Through testing and careful screening, Oddcoll ensures that you have the best local debt collection specialist available everywhere!
An international debt collection Service that covers all the world.
Always local debt collection specialist with their boots on the ground where your debtors are located.
Always manage your cases quickly and easily on our web portal. 24/7.
More information on debt collection in Malaysia
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The debt recovery process in Malaysia
Below is some information on how the debt collection process works if you have a debtor in Malaysia. Payment is primarily sought through persuasion and negotiation. If that is not enough, you may have to go to court. If a debtor is insolvent and does not have enough assets to pay its debts, insolvency proceedings may also be considered.
Out-of-court debt collection in Malaysia.
First and foremost, debt collectors in Malaysia try to get paid by the debtor without having to go to court. Instead, through pressure and persuasion, to get the debtor to pay his debt.
How does this work?
The debtor is contacted by various means such as telephone, letter, etc., and it is made clear to the debtor that non-payment may result in the case being escalated to court in Malaysia.
When a local Malaysian specialist makes that kind of demand and describes the consequences in that way, the debtor is much more cooperative. A debtor is aware that the case is much closer to being escalated when handled by a local debt collection specialist who is familiar with all the procedures and legal rules in Malaysia specifically.
Most cases are resolved at this out-of-court collection stage in Malaysia.
Judicial debt recovery in Malaysia.
The legal system in Malaysia.
Malaysia is a federation of states and federal territories. Federal laws enacted by the Malaysian Parliament apply throughout the country. There are also state laws enacted by the state legislatures which apply in each state. The most important legislation in Malaysia is the Federal Constitution. It provides the legal framework for laws, legislation, courts and other administrative aspects of the law. It also defines the government and the monarch and their powers, as well as the rights of citizens. In situations where there is no law regulating a particular circumstance, case law may apply.
The legal system in Malaysia is based, in the main, on British common law, as a direct result of Britain’s colonisation of the country. Prior to independence in 1957, most of Britain’s laws were imported and either incorporated into local law or simply applied as case law.s
Muslims are subject to Islamic law (syaria). The Islamic laws are mostly civil laws relating to civil matters for private individuals. Syariah rules are set by various sultans, who act as the head of the Islamic religion in their respective regions.
The structure of the courts.
There are five levels of courts in Malaysia, (here in ascending hierarchical order.)
1. Magistrates’ Court,
2. Sessions Court,
3. High Court,
4. Court of Appeal,
5. The Federal Court.
Federal Court: the Federal Court is Malaysia’s highest court. The Federal Court can hear appeals against civil decisions of the Court of Appeal.
Court of Appeal: The Court of Appeal generally hears all civil appeals against High Court decisions.
High Courts: have general supervisory and review jurisdiction over all subordinate courts and have jurisdiction to hear appeals from subordinate courts in civil and criminal matters. The High Courts generally hear civil cases where the claim exceeds RM 1 000 000, with a few statutory exceptions. The High Courts also hear all cases relating to bankruptcy and liquidation of companies.
Subordinate Courts:
Magistrates’ Courts and Sessions Courts in Malaysia have jurisdiction in both criminal and civil matters.
Sessions Courts: The Sessions Court hears cases where the amount in dispute does not exceed RM1 000 000. A Sessions Court can hear all civil cases relating to car accidents, landlord-tenant disputes and enforcement actions.
Magistrates Courts: Magistrates are divided into First Class Magistrates and Second Class Magistrates, with the former being legally qualified and having greater powers.
First Class Magistrate: A First Class Magistrate can hear civil cases where the amount in dispute does not exceed RM100,000.
Second Class Magistrate: civil jurisdiction: a Second Class Magistrate may hear a civil case that does not exceed RM10 000 including interest costs.
To initiate a legal procedure:
Civil proceedings are initiated either by:
– a writ of summons “writ”.
Where there is a substantial dispute of facts, a “writ” should begin the proceeding.
– an “originating summons”.
Where there are few disagreements of facts, and the main issue instead are how to interoperate the law, the proceeding may be begun by originating summons.
Summary judgment: In some cases, a plaintiff can apply for a so-called summary judgment. This is a simplified procedure with a simplified judgment that does not go through the whole legal process. It only applies to cases started by a “writ”. The circumstances of the case must lend themselves to this. Factors that come into play are that there is no real intention or reality for the defendant to defend the action. It is therefore perfectly suited to judicial debt collection in Malaysia where the debtor fails to pay a debt without there being any legal argument for non-payment.
Default judgment: Another type of simplified judgment may also be envisaged. This is a so-called default judgment, which may be applied if the defendant does not respond to the writ of summons.
Who bears the cost of legal action?
Can the costs of proceeding with judicial debt collection in Malaysia, through litigation, be charged to the debtor?
A court has the power to shift costs onto the losing party. How much of the costs are shifted to the losing party depends on the specific case. Factors that come into play include the size of the case, the legal complexity, etc.
When does a claim become time-barred so that it can no longer be pursued legally?
As far as limitation periods for breach of contract are concerned, a claim becomes time-barred six years after the date of the breach. In situations where a judgment has been obtained by legal action, the judgment is time-barred after twelve years, of which it needs to be enforced before then.
Alternative dispute resolutions.
Are there any alternative dispute resolution methods to going to court, in case of legal recovery of a claim in Malaysia?
The alternatives to proceeding with a civil lawsuit by the debtor are mediation or arbitration.
Mediation is a voluntary process regulated by the Mediation Act 2012. Communication and negotiations are facilitated by the existence of a third party acting as a mediator. The parties are free to appoint their own mediator, but may request the Malaysian Mediation Centre of the Bar Council (MMC) to appoint a qualified mediator if they are unable to reach an agreement. Successful mediation results in agreements being written down in a settlement agreement signed by the parties. However, the parties to an unsuccessful mediation may proceed to trial or arbitration.
Arbitration is a private procedure with judicial review by an independent third party acting as an arbitrator. Arbitration is similar to court proceedings in that the arbitrator decides the outcome of the dispute in the same way as a judge, however, the parties are free to decide on the number of arbitrators, the appointment of the arbitrator and the rules to be applied during the arbitration process. An arbitral award is binding on the parties. Normally, arbitration is agreed upon as a method of dispute resolution when entering into a contract with each other.
Enforcement of claims.
As a final step in the process of legal debt collection in Malaysia, one may need to apply for enforcement of the claim. In short, this means applying to the court for assistance in transferring assets from the debtor to oneself. This is provided that you have a successful judgment from legal proceedings (or something equivalent such as a settlement agreement or an arbitration award.) An application for enforcement can then be made to the court. Tools available to the court to get assets from the debtor include seizure and sale of the debtor’s assets.
Insolvency proceedings.
It should also be noted that insolvency proceedings may be initiated. This is if the Malaysian debtor simply does not have sufficient funds to settle its debts. In such a case, reconstruction or liquidation proceedings for the debtor may become relevant.
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