The Insolvency Department has listed three conditions that must be met for insolvents with small-scale debt to apply for an early discharge. This came following Prime Minister Datuk Seri Anwar Ibrahim’s announcement of the initiative under Budget 2023 to assist bankrupt individuals with debts amounting to less than RM50,000.
According to the minister of law and institutional reform in the Prime Minister’s Department, Datuk Azalina Othman Said, the three eligibility requirements that affected insolvents must meet to lift their bankruptcy status include:
- Total debt or outstanding debt must not exceed RM50,000
- Bankruptcy declaration must have passed five-year period from the date of the acceptance and bankruptcy/judgment order
- No court orders, court proceedings, or investigative proceedings conducted on the individual under the Insolvency Act 1967
“Individuals who fulfil these conditions can go to the department’s branches or email them to check on their bankruptcy cases,” said Datuk Azalina in a statement, adding that insolvents can check the Insolvency Department’s FAQ regarding the discharge of bankrupt, available on its official website.
During the re-tabling of the national budget last Friday, Datuk Seri Anwar Ibrahim had said that there were more than 260,000 bankruptcy cases recorded as of January 2023, involving many individuals whom he believes have the potential to contribute to the country’s economy if given a second chance. As such, the prime minister proposed for the the Insolvency Act 1967 to be amended so that eligible insolvents can be freed automatically from bankruptcy soon. In the meantime, minor insolvency cases that adhere to certain conditions can apply to be discharged immediately.
Malaysia’s bankruptcy threshold is currently set at RM100,000, raised from the original RM50,000 back in 2020 in a bid to help the public cope with financial difficulties during Covid-19.
(Sources: MdI, New Straits Times)
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