A total of 31,140 individuals aged 35 and below have been officially registered as bankrupts between 2014 and May 2023, as per the Malaysian Insolvency Department (MDI) records, according to Deputy Minister in the Prime Minister’s Department (Legal and Institutional Reform) Ramkarpal Singh.
Taking note of this concerning situation, he said the government has taken various measures to address the issue.
One such initiative is the implementation of bankruptcy discharge for those individuals declared bankrupt with debts below RM50,000, given they meet the required conditions starting from March 1 of this year.
Ramkarpal mentioned that MDI has made amendments to Section 5(1)(a) of the Insolvency Act 1967 (Act 360) through the Insolvency (Amendment) Act 2020 (Act A1624). These amendments were gazetted on October 22, 2020, and came into effect on September 1, 2021.
“The amendment aims to set the minimum debt limit to RM100,000, which indirectly helps to reduce the percentage of bankrupts registered with MDI, including youth,” he was quoted as saying by Bernama on Monday.
The response was provided in reply to a query from Senator Mohd Hasbie Muda, who sought information about the number of bankrupt youth and the government’s efforts to address the issue.
Additionally, Ramkarpal mentioned that the government has already introduced provisions regarding automatic discharge in 2017 under Act 360.
These provisions enable bankrupt individuals to be released from bankruptcy within a relatively short period of three years, starting from the submission of the statement of affairs to MDI.
He also stated that the government has made improvements to the provision of automatic discharge through the Insolvency (Amendment) Bill 2023, which received approval in the Dewan Rakyat on May 24 and in the Dewan Negara on June 19.
Furthermore, the government, in collaboration with Bank Negara Malaysia, has introduced the Policy document on Fair Treatment of Financial Consumers.
