The Malaysia Department of Insolvency (MdI) is the government agency entrusted to deal with insolvency matters. One of its main roles is to “administer the affairs of debtors and bankrupts pursuant to Bankruptcy Act 1967 and Bankruptcy Rules 1969.”
Beginning in June 2012, MdI has prepared special rooms to encourage bankrupts to visit and talk about their problems. Bankrupts should not hide and are encourage to come forward and use this new facility. The availability of this facility was announced by the department director-general Datuk Abdul Karim Jabil. Having the facility ensures their privacy is protected whereby the entry and exit routes have been separated. This is part of MdI’s initiative to solve most bankruptcy cases. It is targeting to settle 12,000 bankruptcy cases by the end of the year.
According to him, only 30 percent of Malaysians declared bankrupt have decided to take action to resolve their bankruptcy problems through cooperation with MdI. This figure is out of 240, 978 Malaysians who were declared bankrupt up to March of this year.
Bankrupts can visit the department and meet with the insolvency officers to discuss their problems and get personal advice. This is more effective compared to them sending their family members or close friends as representatives to obtain help, information or advice from the department.
In the first quarter of 2012, there were 4568 new bankruptcy cases and 1863 cases were settled or cancelled. It is interesting to note that most bankruptcy cases relates to the following
The others were due to credit card debts, student loans, guarantors and income tax debts.
Another thing to note is the Malaysian government is planning on raising the minimum threshold of debt for a bankruptcy petition to be issued. The new limit is RM50, 000 from RM30, 000 previously. Therefore, a person can only be declared a bankrupt if he owes more than RM50, 000. This step is part of the government’s reforms on the existing insolvency laws.
Jacquelyn is the co-author of the books “Teaching Your Kids About Money” and “Top 93 Personal Finance FAQs in Malaysia” with KC Lau. Jacquelyn is the pseudonym used by Amy Sipagal.
