BANKRUPTCY LIKE A DEATH SENTENCE

THE bankruptcy law is long overdue for an overhaul to make the rules fairer to bankrupts. The law, despite the amendments last year, is outdated and punitive.

Promises were made to change the law for many years but when the change came in the form of the Bankruptcy Amendment Act 2017, it provided little or no relief to the nearly 300,000 bankrupts.

The reason for this is that the government was influenced by banks, corporations and financial institutions.

If one reads section 60(1) of the act, it’s clear that these amendments do not apply to any individual who has been made a bankrupt before this act came into force.

The amendments have done nothing to alleviate the hardship faced by people who were made bankrupt prior to last year.

The promise made by the then minister in the Prime Minister's Department Datuk Seri Azalina Othman Said — that the amendments were intended to make the law more humane (NST, April 13, 2017), and that she wanted to slash the number of 293,000 bankrupts (with more than 60 per cent between the ages of 25 and 44) — did not come to pass.

It’s strange how we live in a country where inanimate entities like corporations are given protection under the law to wind up and start again, but the same second chance is not given to people.

Bankruptcy in Malaysia for many is a death sentence.

Even criminal offenders are released after they have served their sentence and given a chance to rehabilitate. This is not the case with bankruptcy, where once you are made a bankrupt, you are forever at the mercy of your creditor.

While the act changes the law in this regard for people who are made bankrupt after last year by allowing for an automatic discharge after a few years, this reprieve does not apply to those made bankrupt prior to this act.

If the Pakatan Harapan government believes in giving people a second chance, it should act to correct this miscarriage of justice.

Our lawmakers should have the courage to change the law for bankrupts.

In Australia, bankruptcies normally end after three years.

In Canada, debtors can file a consumer proposal as an alternative to bankruptcy.

This is a negotiated settlement to make monthly payments for a maximum of five years.

In England, a bankruptcy usually does not last longer than one year.

Singapore has passed a bankruptcy law wherein a firsttime bankrupt can be discharged in three years. His name will also be removed from public records, five years from the date of his discharge.

I’m not saying that people who are indebted should not be made accountable for their debts, but there is a need to strike a balance between the need to hold bankrupts accountable and allowing them to make a fresh start in their financial affairs after a reasonable period of time.

Furthermore, the law is discriminatory and contravenes Article 8 (1) of the Federal Constitution, which states: “All persons are equal before the law and entitled to the equal protection of the law”.

Section 60(1) of the act creates two classes of bankrupt: those who became bankrupt before the amendment came into force and those declared bankrupt after the act.

This amended law does not accord both groups equal protection under the law. This is discriminatory and unconstitutional.

The government should abolish Section 60.

This will result in the new law being applicable to all and provide equal protection and relief to bankrupts.