Amended insolvency 1967 act to reduce bankruptcy cases

BANGI: The Insolvency Act 1967 which takes effect beginning today is expected to assist in reducing the number of bankruptcy cases by 50 per cent to 10,000 cases a year.
Minister in the Prime Minister's Department Datuk Seri Azalina Othman said the figure was based on the average estimate of 20,000 cases annually administered by the Insolvency Department currently.
"The reduction was due to several amendments introduced under the act namely the minimum level for bankruptcy which had been raised from RM30,000 to RM50,000, social guarantor is not made a bankrupt and the introduction of the voluntary arrangement," she said in her speech when launching the Insolvency Act 1967 Enforcement Date, here today.
In addition, she said, the automatic release which was introduced for the first time in the bankruptcy law in Malaysia was in line with the government's aspiration for bankrupts to return and contribute to the economy.
"Under this automatic release, bankrupts can be released after three years if they file their personal statements and fulfill the targeted contribution stipulated in line with international standards practiced in the developed nations such as in the United Kingdom, Hong Kong and Australia," she said.
Azalina said the automatic release also reduced the time required to administer bankruptcy cases, and benefited the creditors as the dividend could be obtained within a period of three years.
She explained that the act would also enable bankruptcy cases involving four categories namely social guarantors, those who had died, disabled persons and those suffering from chronic diseases to be released.
"The Insolvency Department has made an application to release 10,000 bankruptcy cases involving the four categories next year with the aid of 65 temporary workers for filing work with an expenditure of RM1.2 million.
"After scrutinising the other cases together with the Insolvency Department, I will make a proposal paper to the cabinet to seek the release of 40,000 bankruptcy cases more next year which will incur an additional expenditure of about RM4 million for filing work," she added.
She said that those declared bankrupts before the date of enforcement of the act could also be considered to be given the Release Letter from the Director-General of Insolvency without objection from the creditors if they were categorised within the four categories concerned.
From 2013 until August 2017, there were 23,036 bankrupts aged between 25 to 34 years while there were 1,109 bankrupts aged 25 and below. — Bernama