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Malaysia bankruptcy threshold is RM100K now?

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asked on Jan 23, 2021 at 22:23
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edited on Jun 16, 2021 at 04:36
 
Is it true that threshold for bankruptcy has been increased from RM50k to RM100k? I was unable to find any official statement... is it temporary only during Covid-19 pandemic or a permanent change?
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answered on Jan 24, 2021 at 08:54
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edited Jun 16, 2021 at 04:36
 
Is it true that threshold for bankruptcy has been increased from RM50k to RM100k?
Where did you find this bankruptcy increment statement in this forum? Can show the link? Thanks..
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answered on Jan 27, 2021 at 02:42
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edited Jun 16, 2021 at 04:41
 
Yes its true... Since August last year the Government has announced the news. I also read this increment on Astro Awani Facebook page and Berita Harian web... Here the link:

Source: https://www.bharian.com.my/berita/nasional/2020/08/724678/dewan-rakyat-luluskan-ruu-insolvensi-pindaan-2020

Dewan Rakyat luluskan RUU Insolvensi (Pindaan) 2020

Ogos 25, 2020

KUALA LUMPUR: Dewan Rakyat hari ini meluluskan Rang Undang-Undang (RUU) Insolvensi (Pindaan) 2020 bagi meminda nilai ambang hutang minimum bagi mengemukakan petisyen kebankrapan.

Pindaan itu membolehkan nilai ambang berkenaan dinaikkan daripada RM50,000 kepada RM100,000, sekali gus menjadikannya lebih responsif dan komprehensif terhadap keperluan serta isu semasa berkaitan insolvensi.

RUU itu yang dibentangkan Menteri di Jabatan Perdana Menteri, Datuk Takiyuddin Hasan pada 12 Ogos lalu, diluluskan tanpa sebarang pindaan menerusi undian suara.

Takiyudin ketika menggulung RUU berkenaan berkata, pindaan itu dibuat berikutan data di Jabatan Insolvensi Malaysia (MdI) menunjukkan individu berusia 35 tahun ke bawah adalah golongan paling tinggi terjejas.

Kerajaan sudah mengkaji undang-undang berkaitan muflis melalui Akta Kebankrapan (Pindaan) 2017 (Akta A1534) yang berkuat kuasa pada 6 Oktober lalu.

"Akta ini juga memperkenalkan peruntukan baharu di bawah Seksyen 33C iaitu pelepasan automatik yang mana tempoh muflis ditadbir selama tiga tahun dari tarikh pemfailan Pernyataan Hal Ehwal orang muflis dengan mengambil kira amalan terbaik antarabangsa bagi melayakkan mereka dilepaskan secara automatik.

"Sebagai contoh, amalan di Hong Kong mengambil masa empat tahun, tiga tahun di Thailand, Australia dan New Zealand.

"Orang muflis dalam memohon Pelepasan Automatik ini hendaklah mematuhi syarat digariskan dalam Akta Insolvensi 1967 (Akta 360), " katanya.

Beliau berkata, pindaan itu dapat membantu dan memudahkan orang muflis untuk memahami dan mematuhi arahan berdasarkan undang-undang ditetapkan.

"Kunci utama seseorang yang muflis supaya statusnya tidak berkekalan sepanjang hayat ialah memahami, memberi kerjasama penuh dan mematuhi arahan MdI," katanya.
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answered on Jan 27, 2021 at 11:40
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edited Jun 16, 2021 at 04:43
 
Hi @Halimdeen,

RM50,000 TO RM100,000

The result from my google online search, which is reproduced below, confirms what you have said is true:

BANKRUPTCY THRESHOLD! INCREASED FROM RM50,000 TO RM100,000
by Samantha Au Yong, LLB (Hons) (Cardiff), Barrister-at-Law (Middle Temple)
 
COVID-19 pandemic has significantly affected and impacted businesses and the economy throughout the world. In order to lessen the impact of the pandemic, the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Bill 2020 (“the Act”), was tabled in Parliament to provide temporary relief to people by modifying the relevant provisions in several legislations including the Insolvency Act 1967.
 
This article briefly discusses the modification of the Insolvency Act 1967 made by the Act.
 
1. Bankruptcy threshold has been increased from RM50,000 to RM100,000
 
The Act was passed by the Dewan Rakyat on 25th August 2020, which amended the Insolvency Act 1967 by increasing the bankruptcy threshold from RM50,000 to RM100,000. In other words, creditors may only file for bankruptcy action against their debtors if the debt owing is more than RM100,000. However, a date has yet to be fixed by the Minister for the Act to come into operation (“Operation Date”).
 
2. When will the new amendment take effect?
 
The Act does not have a retrospective effect. Any bankruptcy proceedings commenced pursuant to the Insolvency Act 1967 which are still pending immediately before the Operation Date, shall be dealt with under the Insolvency Act 1967. In other words, any bankruptcy proceedings having commenced immediately before the Operation Date remain unaffected.
 
3. What will happen if you have been declared as a bankrupt?
 
All of your property shall be automatically vested in the Director General of Insolvency (DGI) and the DGI shall take possession of the property. Further, travel ban will be imposed on you where you will be unable to travel out of the country without the DGI’s written permission or before obtaining a court order. The DGI has also the authority to manage your finances including salaries, loan repayments and other commitments.
 
4. How can you be discharged from being a bankrupt?
 
There are three modes for a bankrupt to be released from bankruptcy.
 
a.  First mode – Order of Court
 
Section 33(1) of Insolvency Act 1967 Act 360 (IA 1967) states as follows:-
 
“A bankrupt may at any time after being adjudged bankrupt apply to the court for an order of discharge, and the court shall appoint a day for hearing the application.”
 
b.  Second mode – the DGI’s certificate
 
Section 33A of IA 1967 states as follows:-
 
“(1)   The Director General of Insolvency may, in his discretion but subject to section 33B, issue a certificate discharging a bankrupt from bankruptcy.
 (2)   The Director General of Insolvency shall not issue a certificate discharging a bankrupt from bankruptcy under subsection (1) unless a period of five years has lapsed since the date of the bankruptcy order.”
 
Section 33B of IA 1967 states as follows:-
 
(1)   Before issuing a certificate of discharge under section 33A, the Director General of Insolvency shall serve on each creditor who has filed a proof of debt a notice of his intention to issue the certificate.  
 
c.  Third mode – Automatic Discharge
 
Section 33C of IA 1967 states as follows:-
 
(1) A bankrupt shall be discharged from bankruptcy under this section on the expiration of three years from the date of the submission of the statement of affairs under subsection 16(1)—
 
(a) if the bankrupt has achieved amount of target contribution of his provable debt; and
 
(b) if the bankrupt has complied with the requirement to render an account of moneys and property to the Director General of Insolvency under paragraph 38(1)(b).
 
Based on the above, the most common mode is either the First or Third Mode. However, there are a stringent process and requirement to satisfy the courts and/or the DGI in order to be released as a Bankrupt. However, if one can comply with the section of the Insolvency Act 1967, there should not be any reason why a discharge will not be given.           
 
                     
NOTE: The contents herein are intended to be for general information and reference only, and it does not, and is not intended to, constitute or substitute for legal advice.
For any further enquiries, please do not hesitate to contact our Mr. Nadesh Ganabaskaran @ nadesh@malekpauliangan.com.
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answered on Jan 27, 2021 at 14:53
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edited Jun 16, 2021 at 04:45
 
@qyiidresoa

There was already a discussion on the COVID BILL 1 month ago with details of the terms and conditions under this thread:
https://www.lawyerment.com/answers/questions/13840/what-is-a-vesting-order-obtained-by-aigon-can-i-make-a-negotiated-settlement?g=2#tab-top

Page 2 Post No.: 7.

Basically it is valid for a period of 2 years with conditions.
As I had written, there are pros and cons for different categories of debtors.

Excerpts:

Malaysia’s temporary measures under the COVID Bill

Minister in the Prime Minister's Department Datuk Takiyuddin Hassan said the relevant bill was passed in the Dewan Rakyat on Aug 25 and in the Dewan Negara on Sept 22.

"The gazetting follows the assent by the Yang di-Pertuan Agong and the Act would be enforced for two years," he said.

The COVID Bill shall generally remain in operation for two years from the date of publication. However, the COVID Bill provides for specific periods of operation for the relevant Parts.
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