KUALA LUMPUR, June 23 — Nearly 60 per cent of the 46,132 Malaysians who declared bankruptcy from 2018 to May this year were aged between 25 and 44, according to the latest data from the Insolvency Department.
The official data also showed that nearly 42 per cent of those who declared bankruptcy in the last four-and-a-half years cited personal loans as a factor leading to bankruptcy, followed by nearly 15 per cent who listed vehicle purchase as a factor, and more than 13 per cent declaring bankruptcy because of a business loan.
“The fact that many of them fall into bankruptcy due to personal loans is something that is worrying because we have no idea why they have taken loans; they could have spent the money on something that was not a necessity.
“But it is also possible that these people are taking loans to pay their debts. They should have sought advice from the experts, for example, the Credit Counselling and Debt Management Agency,” dean of the Human Ecology Faculty at Universiti Putra Malaysia Mohamad Fazli Sabri told The Star in a news report published today.
Data from the Insolvency Department also showed a steady decrease in the number of bankrupts over the years.
Those filing for bankruptcy totalled 16,482 in 2018; which fell to 12,051 in 2019; 8,351 in 2020; and 6,554 last year.
But Fazli said the decrease could be attributed to an amendment in the Insolvency Act in 2020 which raised the bankruptcy threshold from RM30,000 to RM100,000.
Corporate communications head of the Credit Counselling and Debt Management Agency (AKPK) Sazlin Zainal Abidin told The Star that the public should seek help from AKPK before taking applying for loans and not only when they are already in debt.
“The public should approach AKPK even prior to taking any new loans. Then we will help them to look at their overall financial situation and advise them accordingly.
“Our services to individuals are free of charge and without the use of any third-party agents,” she was quoted as saying.
She added that 85 per cent of those who reached the end of AKPK’s Debt Management Programme managed to settle their debts and regain control of their finances.
The highest number of bankruptcy declarations up to May 2022 comes from Selangor with 72,608 cases, followed by the three Federal Territories of Kuala Lumpur, Putrajaya and Labuan combined (46,876) and Johor (32,441).