SHAH ALAM, Oct 27 - The Second Chance Policy’s fast-track programme, introduced in February, targets four groups of bankrupt individuals for discharge from bankruptcy status.
The groups comprise single mothers or fathers, scam victims; micro, small, and medium enterprise (MSME) entrepreneurs; and borrowers affected by abandoned housing projects.
Selangor Insolvency Department director Tengku Intan Suraya Tengku Ismail said these groups are being prioritised to help them get back on their feet, rebuild their lives, and contribute to the national economy.
“There are specific conditions, including that the bankruptcy case must have been administered for at least five years. Single parents are among those given special attention to enable them to return to work and support their families.
"Victims of financial fraud are also given the opportunity to obtain bankruptcy discharge. The fast-track route also targets MSME entrepreneurs affected by external factors or third-party failures, as well as homebuyers burdened by abandoned housing projects,” she said on Media Selangor's 'Bicara Semasa' programme.
Tengku Intan also advised those discharged from bankruptcy to make full use of the opportunity to build a better future.
“Starting next year, several other categories of individuals will also be considered for discharge, including disabled persons, patients with critical illnesses, gig workers, and individuals without a fixed income.
“All these measures are intended to give them a fresh start and help them rebuild their lives,” she said.
Number of bankruptcy discharges rises
Commenting on the number of individuals discharged from bankruptcy, Tengku Intan said 123,000 people received discharges in 2023, followed by 252,000 in 2024, 261,000 in 2025 and 196,000 up to August this year.
“Bankrupt individuals should not be afraid to deal with the Malaysian Insolvency Department. Our role is to administer bankruptcy cases and help them manage their finances in accordance with the regulations in force.
“Some individuals remain bankrupt for more than a decade because they fail to appear at the Malaysian Insolvency Department to manage their cases and do not make their monthly instalment payments,” she said.
In a related development, the minimum debt threshold for declaring an individual bankrupt will be raised from RM100,000 to RM150,000 starting in 2027.
“The threshold was previously raised from RM50,000 to RM100,000 in September 2021. The next increase was announced in Budget 2027 on October 5, and this higher minimum threshold is expected to reduce the number of individuals declared bankrupt.
"We therefore advise members of the public facing debt problems to reorganise their finances, discuss their situation with their banks and seek assistance from the Credit Counselling and Debt Management Agency before their circumstances become more serious,” Tengku Intan said.
