Roadshow on Bankruptcy (Amendment) Bill

KUCHING: The Insolvency Department is holding a nationwide roadshow until the end of the month on the Bankruptcy (Amendment) Bill 2016.

During the briefing here recently, Insolvency Department Bankruptcy Unit head Timothy Jamit Bilong explained the new Bankruptcy Act 1967, which has been amended and passed in the Dewan Negara, introduced eight major changes to help reduce bankruptcy rates in Malaysia.

They are protection for social guarantors, selfpetition or registered post with acknowledgement of the receiver, rescue mechanism through voluntary arrangement, raising the minimum threshold for bankruptcy, automatic discharge, waiving bankruptcy without objection procedure by creditors, single bankruptcy order, and insolvency assistance fund.

“Social guarantors will be exempted from bankruptcy, meaning they cannot be declared bankrupt especially those who provide, not for profit, guarantees for education loan, hire- purchase transaction of a vehicle for non- business use and housing loan transaction for personal dwelling. So they should not be penalised,” Timothy explained.

“This is to ensure fairness and protection for the social guarantors.”

He said there will also be priority on serving the bankruptcy notice and petition through personal service or registered post with the acknowledgement of the receiver.

“This amendment means the debtors will have knowledge of the bankruptcy action to be taken against them and in turn will give the chance to debtors to enter a rescue mechanism,” he said.

He explained the new rescue mechanism called voluntary arrangement, will allow debtors to negotiate an arrangement with their creditors before legal proceedings begin.

He pointed out that the amount for an individual to be declared a bankrupt would be a minimum of RM50,000 from the present RM30,000.

“The Bill also introduced a new provision allowing for automatic discharge of the bankruptcy on the expiration of three years from the date of submission of the debtor’s statement of affairs,” he said.

“However, the debtor must fulfil or achieve the target contribution of his or her provable debt and renders an account of moneys and property to the director general of insolvency ( DGI).”

Timothy said certain bankrupts would be allowed to waive bankruptcy without the objection procedure by creditors.

“This applies to social guarantors, deceased, people with disabilities who are certified by the Welfare Department, and those with chronic diseases certified by medical officers,” he said.

The Bill, he continued, will also introduce a single bankruptcy order to replace the current two- tier order system namely Receiving Order and Adjudication Order, whereby the debtor will be adjudicated as a bankrupt upon the granting of a bankruptcy order.

“And fi nally, the setting up of an insolvency assistance fund to be administered and controlled by the DGI for the purposes of improving the administration and proceedings relating to bankruptcy,” he added.