60 people declared bankrupt each day, says Nancy Shukri

Minister in the Prime Minister's Department, Nancy Shukri, said that changes were being made to current existing bankruptcy law. — Pic by Melissa Chi
Minister in the Prime Minister's Department, Nancy Shukri, said that changes were being made to current existing bankruptcy law. — Pic by Melissa Chi

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PUTRAJAYA, Oct 31 — Each day in this country, 60 people aged between 35 and 44 years are declared bankrupt, with them making up 34.31 per cent, the highest, out of the total number.

This group is followed by those aged 45-54 who form 26.49 per cent, 25-34 (20.09 per cent) and 55 and above, 11.77 per cent.  According to Minister in the Prime Minister’s Department Nancy Shukri, this year up to September, 16,306 people were declared bankrupt and the number kept increasing each year.

“From 2007 until September this year, 116,488 people were declared bankrupt,” she told a news conference after handing out bankruptcy clearance certificates to 30 individuals, here, today with the Malaysia Department of Insolvency (MdI) director-general Rohana Abd Malek also present.  She said since MdI was established until September this year, 251,209 people were declared bankrupt and out of this figure, only 28 per cent sought the advice of the MdI for case management while the rest could not be detected.

According to statistics from MdI, 13,238 people were categorised as bankrupt in 2007, 13,855 in 2008, 16,228 in 2009, 18,119 in 2010, 19,167 in 2011 and 19,575 in 2012, with those in the private sector or doing business forming the highest percentage.

During the 2007-2013 period, Malays and Chinese constituted the biggest group at 45.10 per cent (52,535) and 32.97 per cent (38,407) respectively compared to the Indians who formed 12.63 per cent (14,710) and other races making up 9.30 per cent (10,836).

Based on categories (2007-2013), car loan defaulters recorded the highest number of bankruptcy cases at 30,451 (26.14 per cent), followed by housing loan defaulters at 20,529 (17.62 per cent), personal loan defaulters at 18,053 (15.50 per cent) and business loan defaulters at 14,431 (12.39 per cent).  The MdI statistics also show that credit card debts made up 4.18 per cent (4,875 cases) of the total number.

Nancy said bankrupty was not the end of the road for defaulters as it could be protection instead, when they could not pay up their debts due to various factors.

She said in developed countries like Australia, the United Kingdom and United States, the people used bankruptcy as protection by filing bankruptcy application and by restructuring their debts.

“This is the practice that we wish to encourage as we don’t want people to just borrow money and then shirk the responsibility of paying up their loans or debts.”

She said between January and September 2013 alone, 27,432 bankruptcy petitions were filed in court.

“Out of this number, 99.2 per cent (27,210 cases) of the bankruptcy petitions were made by the creditors and 0.8 per cent (221 cases) were made by the debtors themselves.”

She said for those burdened with debts and having difficulty to pay up, the government through Bank Negara had set up the Credit Counselling and Debt Management Agency to assist them.

The existing bankruptcy law was also in the process of being amended to prevent many people from being victims of bankruptcy, she added.— Bernama

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