The Bankruptcy (Amendment) Bill 2016, which provides a second chance for individuals who have been declared bankrupt, was tabled for second reading at the Dewan Rakyat sitting today.
Minister in the Prime Minister’s Department Azalina Othman, when tabling the bill, said the bill would benefit not only the debtors but also the creditors.
She said the government had considered eight policy changes to amend the Bankruptcy Act 1967, which included preventing bankruptcy action on social guarantors and raising the minimum threshold for bankruptcy.
“In addition, a bankrupt can be discharged from the bankrupt status earlier after three years from the filing of the statement of affairs, set priority for delivery of the notice of bankruptcy and self-petition or registered post with acknowledgement of the receiver.
“Create a rescue mechanism, introduce a single bankruptcy order to replace receiving order and adjudication order, as well as set up an insolvency assistance fund,” she added.
Azalina said the government also considered waiving bankruptcy without objection procedure by creditors for bankrupts, who are social guarantors, deceased, people with disabilities who are certified by the Social Welfare Department and those with chronic diseases certified by medical officers.
Based on statistics from the Insolvency Department of Malaysia, she said there were 292,086 cases of active bankruptcy and bankrupts yet to be discharged, with 58.57% of them aged between 25 and 44.
“The government is concern with the bankruptcy issue, especially those who are declared bankrupts because they were guarantors to borrowers who failed to settle their loans, they should not be held fully responsible,” she said.
Therefore, Azalina said the government had drawn up a strategy to transform the existing law to a modern law in keeping with the international legal development and current times.
To ensure the success of this bill, a transformation of the mind is required from all quarters to ensure administration of bankruptcy cases in Malaysia is of world standard and become the best model internationally, she added. – Bernama