Is not paying a debt a crime in Malaysia? Can I make a police report?

Is not paying a debt a crime in Malaysia? The short answer

In Malaysia, not paying a debt is not by itself a crime: it is cheating only if the person deceived you from the start (Penal Code, section 415). You can make a police report, but the police do not collect debts, so the way to recover an ordinary debt is a court claim.

Money handed over for a set purpose is different: using it dishonestly for something else can be criminal breach of trust. The police's own FAQ agrees: failing to pay a debt is not necessarily a crime, and a loan with no deception at the start can be a civil dispute.

This guide is for both sides: the person who is owed money, and the person told "pay, or I will report you to the police". In Malay the question is often "tak bayar hutang, boleh report polis?"; in Chinese, 欠钱不还可以报警吗 (can I go to the police if someone will not repay?). The other side asks 马来西亚欠钱不还会坐牢吗 (can I be jailed in Malaysia for not repaying?). If you are the one being threatened, skip to the sections on threats and on jail.

Key facts (Malaysia, as at 28 October 2026):

• Not paying a debt is not, by itself, a crime. Cheating needs a deception at the start.
• You can report at any police station, in person. A report you write yourself must be in Malay or English.
• Knowingly giving the police false information to cause trouble for someone: up to 6 months in jail, a fine of up to RM2,000, or both.
• Civil prison (jail in a civil case, not for a crime): up to 6 weeks, and only if the debtor could pay a court order and did not. It does not cancel the debt.
• Small claims: RM5,000 or less, RM20 to file.

When does an unpaid debt become cheating or criminal breach of trust?

An unpaid debt becomes cheating when the person lied to get the money, and criminal breach of trust when money entrusted for a set purpose is dishonestly misused. What counts is what they meant when they took the money, not the fact that they failed to pay later.

Cheating means deceiving someone and so getting them to hand over money or property. The Penal Code draws the line plainly: "Mere breach of contract is not of itself proof of an original fraudulent intent." Its own example of cheating is a person who makes a lender believe they will repay, never meaning to. But a person who meant to keep the deal when they took the money, and later broke it, "does not cheat, but is liable only to a civil action". In plain words, they can only be sued.

These can point to a crime:

• A lie at the start: they never meant to repay.
• A false identity, false documents or fake goods used to get the money.
• A cheque on an account they knew was empty, never meaning to pay.
• Money given for a set purpose, dishonestly used for something else.

These, on their own, do not show a crime:

• They meant to pay, then could not or would not.
• They paid part, then stopped.
• They moved away ("lari"), went quiet or blocked you.
• A dispute over the work, the goods or the amount.

Criminal breach of trust (CBT; section 405; pecah amanah jenayah in Malay) needs money or property "entrusted" to the person: given to them to hold or use for you. If they honestly (in good faith) used it differently from what you said, you have only a civil claim. An ordinary loan is not CBT: the borrower is free to spend the money, and their duty is to repay it. A contractor's deposit or money put into a shared business can fall on either side. Money lent to someone met only online who has vanished may be a scam. The FAQ covers all three.

Can I make a police report if someone owes me money? What happens next?

Yes: you can report at any police station in Malaysia, and the police must take it down; what happens next depends on whether it shows an offence.

Go to a station in person: online e-Reporting is only for lost items and other matters with no crime in them. An officer writes down what you say, reads it back, and you sign it. Or you write it yourself on form Pol. 55, in Malay or English.

Bring your IC and your records: bank transfers, messages, any cheque, and the person's name and phone number. Explain what they told you to get the money, and why you believe it was untrue from the start. Say what you do not know, and do not add to it. An honest report is not an offence even if the police find no crime, but a knowingly false one is.

The police then decide whether your report shows an offence. Cheating that gets you to hand over money or property (section 420) and criminal breach of trust are seizable offences. Seizable means the police can investigate, and arrest without a warrant, on their own. Plain cheating that did not get you to hand over money or property is not seizable. For that, the station will tell you to take your complaint to a Magistrate's court, and the police need the Public Prosecutor's order to investigate.

If the police find no offence, they can close the file as "no further action" (NFA; tiada tindakan lanjut in Malay), or tell you it is a civil matter. That does not mean you are not owed the money. It means the police will not act.

If they do investigate, you can ask the investigating officer how the case is going. For a seizable offence, you can also ask the station for a status report once 4 weeks have passed since your report. The station must reply within 2 weeks of your request, unless that would harm the investigation.

A police case is about a crime, and a report does not get your money back. Either way, the usual route to recover the money is a civil claim, and you do not need a police report to file one.

The police said it is a civil matter. What can I do now?

You can sue: a civil matter, or "kes sivil", means a court decides whether the money is owed, and you can file the claim yourself.

Before you file, a short written demand often helps: the amount, a date to pay, and what you will do if they do not pay. It can be your own letter or message; if they have blocked you, post it to their last known address and keep the receipt. Do not name or shame them online or in group chats: that can be an offence. If they offer instalments, put the deal in writing, signed by them, with the amount, the dates and what it settles.

If you are an individual owed RM5,000 or less, you can use the small claims procedure. You file Form 198 and pay RM20, and no lawyer may act for either side. Filing a small claim, step by step walks through the form.

Owed a little more than RM5,000? You may be able to give up the extra to use small claims. Ask the court registry first: the part you give up is lost for good. Otherwise, a Magistrates' Court claim, up to RM100,000, costs RM100 to start; you may run it yourself, but a company must use a lawyer. The next step after an ignored letter of demand sets out which court, the fees and what to check before you file.

Your proof is your own record: bank transfers, messages in which they admit the debt, part payments and witnesses. If nothing was signed, read how to prove a loan with no written agreement.

Someone threatens me with the police or jail over a debt. What should I do?

Stay calm and keep the messages: owing money is not a crime in Malaysia, and a police report does not lead straight to arrest.

If an officer contacts you, check it is real by calling the station on a number you find yourself. If a real officer asks you to come in, go; refusing a written order to attend can lead to a warrant. The officer writes down what you say, reads it back in the language you used, and lets you correct it before you sign. You must tell the truth, but you need not answer a question that could expose you to a criminal charge. If the report says you cheated, speak to a lawyer before you go. Bring your payment records, messages, any written agreement and, for a business, its accounts.

Deal with the debt, not the threat. A deadline in their message is their own timetable, not a court order; reply in writing before it. If the debt is several years old, a written admission or a part payment can restart the time limit to sue you. Read whether an old debt can still be claimed first. If you owe the money, say so, offer a payment plan in writing that says what it settles, and keep proof of every payment. If you dispute all or part of it, say which part and why, once and calmly, in the same message as any offer.

Do not hide your property, or give it away cheaply, to keep it from the people you owe: that can be a crime. Selling things at a fair price to pay what you owe is not hiding them; keep a record of each sale and where the money went.

Some threats are offences in themselves. A threat to harm your reputation, meant to cause alarm, can be criminal intimidation. Since 11 July 2025, posting your name, photo or other details to harass, distress or frighten you, for example in a WhatsApp group, can also be an offence. It is enough that the poster should have known the post was likely to do that. Ask them in writing to delete the post, and keep a screenshot with the group name and the date. You can report threats at any police station. Do not answer with threats of your own.

A Bar Council ruling says it is improper for lawyers to threaten criminal proceedings to recover a civil debt. The person you owe is not bound by that ruling, but a threat does not make the debt a crime. If a letter of demand threatens you with the police, read what to do in the first 7 days after a letter of demand first.

Never ignore court papers. They usually come by hand or by registered post. If you are sued, you usually have 14 days after the papers are served on you (formally delivered) to answer them at the court. That means a court form, not a message to the person you owe. Get advice at once: what to do when court papers arrive explains the steps.

Can I go to jail for not paying a debt in Malaysia?

Not for owing money: only a court can send a debtor to civil prison, for up to 6 weeks, and only after judgment, if they could pay and did not. A judgment is the court's decision that the money is owed.

Civil prison is jail in a civil case to enforce a court's payment order. Being sued, or sent to civil prison, for a debt is not a criminal conviction, so it does not give you a criminal record. After judgment, the court can summon the debtor to answer questions about their income and property, and order payment at once or by instalments. If the debtor misses those payments, the court can call them back to explain why. After a small claim, the claimant starts this with Form 208, a notice to show cause. The court then examines the debtor and can order their property seized and sold, allow more time or instalments, or send them to civil prison. It can send them to prison only if they had the means to pay (enough money or property) since its order.

Prison does not cancel the debt, and the creditor can still collect it afterwards.

A court can also order a debtor's arrest in narrow cases. An arrest brings the debtor before the court, or makes them give security (a sum the court names, so that they come back). It is not a sentence for the debt. One case is a debtor who ignores a summons to be examined; another is a debtor likely to leave to avoid paying (see the FAQ). Travelling for work or a holiday is not running away. The debt recovery guide shows each court step, from the claim to collection.

Talk to a lawyer if you cannot tell whether it is cheating or CBT, if the sum is more than you can lose, or if court papers reach you. What a lawyer's letter of demand costs gives a price range.

This article is general information about Malaysian law as at 28 October 2026, mainly for Peninsular Malaysia. Where Sabah and Sarawak differ, it says so only for the points it covers. It is not legal advice on your situation, and reading it does not make you a client of the firm. Police practice, fees and thresholds change, so check the current position before you rely on one.