Fewer Malaysians To Declare Bankrupt With New Amendments
The proposed amendments to the Bankruptcy Act 1967 will protect social guarantors, and likely result in fewer bankrupts in Malaysia if passed.
According to the Minister in the Prime Minister’s Department Datuk Seri Azalina Othman Said, there are a lot of social guarantors in Malaysia who were declared bankrupt due to the substitute service system currently in place.
“A bankruptcy study revealed that more people are liable to be declared bankrupt under this substitute service system.
“We need to amend the law to give a chance to those who are served the bankruptcy notice to defend themselves,” she said.
The proposed amendments include shortening the period before a person can be discharged from bankruptcy from the current five years to three years, while those above 60 or suffering chronic diseases should be automatically discharged after a certain period.
Another proposed change is raising the threshold of debt before being declared bankrupt from RM30,000 to RM50,000.
In Singapore the minimum threshold is set at S$15,000 (RM47,000), Thailand at THB1 million (RM124,000), Brunei at $10,000 (RM31,000), Australia at A$5,000 (RM16,000), Britain at £5,000 (RM27,000) and United States at US$15,000 (RM69,000).
According to Insolvency Department statistics for last year, 82,383 individuals have been declared bankrupt by the courts, of which 69.3% are male.
Selangor recorded the highest number of cases (22,593), while Perlis has the lowest (354).
The number of civil servants who declared bankrupt has also increased by 13.9% in 2016, compared to the year before.
“In 2016, we recorded 3,276 bankrupt civil servants, compared to 1,093 in 2015 and 960 cases in 2014”, she said.