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Good News! Automatic Discharge for bankrupts coming soon!

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asked on Feb 7, 2012 at 17:26
by   Sharimah
edited on Aug 1, 2016 at 23:21
 
235,908 individuals declared bankrupt as of October 2011: DG

Published on: Wednesday, December 07, 2011

Kota Kinabalu: As of October this year, a total of 235,908 individuals were declared bankrupt in the country, said the Director-General of Insolvency Department Datuk Abdul Karim Abdul Jalil.

He said based on the records of the Malaysian Insolvency Department, the main causes for bankruptcy were hire-purchase agreements (26 per cent), followed by personal loans (21 per cent), housing loans (14 per cent) and other loans including business loans and corporate guarantees.

"This places Malaysia among the countries with a large number of bankruptcies compared to the other countries, with an average of 41 individuals declared bankrupt each day," he said.

Between 2005 and October this year, a total of 14,000 cases were discharged of bankruptcy at the discretion of the Director-General of the Department of Insolvency, Abdul Karim told reporters after opening the dialogue on insolvency at the Federal Administration Complex in Likas, here, Tuesday.

The discretion refers to the bankrupt individual paying back the loan on instalments continuously for more than five years and that they offered close cooperation with the Department of Insolvency.

Abdul Karim said the Government was reviewing the Malaysian Bankruptcy Act 1967 in efforts to assist those who were declared bankrupt to continue with life without the debt burden, including automatic discharge.

SOURCE: www.dailyexpress.com.my/news.cfm?NewsID=79943

Datuk Abdul Karim Bin Abdul Jalil
Current Director-General of Insolvency (DGI)
From 16.04.2009 to current.
Department of Insolvency, MDI
Prime Minister's Department

PROFILE Source: www.insolvensi.gov.my/fair2011/images/stories/CV%20DATUK%20ABDUL%20KARIM%20ABDUL%20JALIL.pdf
Second chance

11 December 2011
By P. Selvarani
KUALA LUMPUR

Under proposed amendments to the law, bankrupts will soon have an opportunity to start anew after five years

Debtors will have a lot of reasons to smile once proposed amendments to the law are passed to enable bankrupts to be discharged automatically.

It is learnt that under the amendments, bankrupts may be automatically discharged after five years without having to apply to the courts or wait for the approval of the director-general of Insolvency (DGI), to be freed of the social stigma.

The Insolvency Department is seriously considering this move -- which is practised in many countries -- to give bankrupts a second chance to start anew.

The automatic discharge was proposed as the department believes making people, especially those who are honest and credible, a bankrupt for life will not benefit anyone.

"In many cases, it does not help them or their creditors as some of these people really cannot nor have the means to settle their debts.

"Some debtors are also untraceable. So what's the point of having them in our statistics? An automatic discharge will help them get back on their feet and start life afresh," DGI Datuk Abdul Karim Abdul Jalil told the New Sunday Times.

However, he said, many issues needed to be looked into.

"Should any conditions be imposed before this automatic discharge procedure is applied, especially to the dishonest and non-cooperative bankrupts? Or can the creditors or the DGI raise objections in relation to the conduct of the bankrupt? These are matters we have to thoroughly look into."

Several countries, including Thailand and New Zealand, have laws which allow for the automatic discharge of a bankrupt after three years as long as the bankrupt is not involved in fraud.

In Canada, a first-time bankrupt is automatically discharged after nine months if he fulfills all his duties and does not have any excess income. In the United Kingdom, bankrupts may be discharged after a year.

Karim said the automatic discharge was among the proposals under amendments to the existing laws to create a single Insolvency Act.

The proposed amendments have been submitted to the attorney- general.

At present, apart from paying their debts in full to qualify for a discharge, bankrupts in Malaysia can also be discharged at the discretion of the DGI.

This was made possible under amendments to the Bankruptcy Act in 2003 which gave the DGI the authority to discharge a bankrupt after five years or more.

Previously, bankrupts could only be released by the court if they paid their debts in full or if they were wrongly declared a bankrupt.

The automatic discharge proposal was mooted in 2003, but the authorities then felt that it was not the right time to introduce it.

"So, we introduced the Certificate of Insolvency instead which gave the DGI the power to discharge a person after five years or more, subject to objections from the creditor.

"And we used this certificate to save credible entrepreneurs, such as those who became bankrupt due to the economic crisis and not because of their own folly."

Since then, the department has discharged 14,174 bankrupts based on their good conduct and cooperation.

"We had also discharged extremely poor people and the sick.

"Through our outreach programme, we had personally witnessed their condition.

"Some of them were so poor or sick that they could not even make ends meet, let alone repay their debts. In such cases, we released them from bankruptcy because it would benefit no one for us to continue administering their files. Instead, it may incur us unnecessary costs."

Karim said it was necessary to streamline insolvency laws in Malaysia, such as personal insolvency (under the Bankruptcy Act 1967), corporate insolvency (which comes under the Companies Act 1965) and other related laws for a more efficient administration of insolvency cases as many of the laws now overlapped with those of other agencies.

For example, although the DGI is the official receiver and liquidator of companies, which have wound up and societies and trade unions which have been de-registered, laws pertaining to these matters are still parked under the Companies Act 1965, Societies Act 1966 and Trade Unions Act 1959, which come under the jurisdiction of the respective agencies.

"The international trend now is to put all this into one legislation to be administered by one organisation.

"We don't want the functions to overlap.

"We need a more effective and innovative insolvency administration system to create a new insolvency landscape in the country. Without doubt, an effective and innovative insolvency system will contribute tremendously to a country's financial stability."

He said on an average, 41 individuals were declared bankrupt every day.

Most of the bankrupts had defaulted on the payment of their car loans.

SOURCE: www.nst.com.my/local/general/second-chance-1.17673#ixzz1lfJwLKwL
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answered on Aug 12, 2011 at 14:42
by   Sarip
Is the amendment to the Bankruptcy Act as announced by Najib on Budget speech last year already enforced. Is it true that among the changes are that there are automatic discharge? Can somebody give insight?
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answered on Feb 7, 2012 at 18:05
by   Notapro
edited Jun 20, 2016 at 04:54
 
I do hope the proposed amendments submitted to the Attorney-General can be quickly implemented so that many bankrupts can start their lives afresh and contribute to the prosperity of our country, 'Malaysia Boleh', the land of the Constitutional Monarchy. We should campaign and voice it publicly before the upcoming General Election.

Now is the right timing! If anyone can do it, please do it soon or write to our PM's blog (Najib) to effectively voice it out once and for all. After all, I would like to consider that this unique forum of its kind in Malaysia is a forum of the people, by the people and for the people!
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answered on Feb 7, 2012 at 19:09
by   Anonymous
edited Jun 20, 2016 at 05:08
 
Questions & Answers Related to Bankruptcy Matters

The following is directly from the official portal of the Malaysia Department of Insolvency (MDI).

1. Can a bankrupt continue using his existing credit card?
A bankrupt can only use his existing credit card up to the amount of RM1000.00. If the bankrupt wishes to continue using his credit card for an amount of more than RM1000.00, he must notify the issuing bank or finance company as to the status of his bankruptcy so as to allow them to decide whether they are prepared to continue to extend the credit to the bankrupt. If the bankrupt fails to notify the issuing bank or finance company, he will be deemed to have committed an offence under the Bankruptcy Act 1967.

2. Can a bankrupt make an application to DGI to reduce the amount of debt?
The DGI has a duty to supervise the conduct of a debtor and to administer the debtor's estate. However, DGI has no power to reduce the amount of debt that has been filed by creditors. If a bankrupt intends to reduce the amount of debt for the purpose of making full settlement, he should write in or meet the officer at the particular Bank stating his intention to do so. In the event the Bank agrees to lower the amount of debt, he has to make payment in the specified amount to DGI. We will then proceed to declare the dividend to creditors.

3. Can a bankrupt make direct payment to the creditor to settle his debt?
A bankrupt is not allowed to make direct payment to the creditor and all payment has to be made through the DGI. The payment will be credited into the estate account and distributed to the creditors who have filed in Proof of Debt.

4. Can a bankrupt open a bank account or continue using his existing account?
Once person is made a bankrupt, his existing account shall be deactivated and withdrawal of money would be debarred. A bankrupt, however, may open a bank account or continue using his existing account for reasons such as crediting his salary or any profit gained provided he obtains the permission of the DGI. He would then have to make an application for permission of DGI for reactivation of the account.

The application to obtain the DGI's permission in both cases shall be made to the respective MdI branch, where his bankruptcy case is being administered.

5. Can a bankrupt transfer his property?
A bankrupt is not allowed to transfer his property to a third party once a Receiving and Adjudication Order has been entered against him. As soon as a person is declared bankrupt, any of his property shall be automatically vested upon the DGI.

6. Can a bankrupt travel overseas?
A bankrupt may not travel overseas unless with the written permission from the DGI or after obtaining a court order allowing him to do so. In order to get a written permission from the DGI, a bankrupt has to make an application by stating his intention, reasons and duration of travelling. The application form with supporting documents must be sent to the Branch that administers his. Our dedicated officers will process the application and will inform the bankrupt on the decision of his application via his preferred mode i.e e-mail, phone call or letter. The application can be downloaded in our website under 'Forms' link.

7. Can a person declare himself/herself a bankrupt if he is unable to pay his debts?
A person can make an application in court to declare himself/herself a bankrupt as allowed under section 7, Bankruptcy Act 1967. The person is required to file a petition in a High Court stating his inability to pay his debt. The procedures required to be followed are stated specifically in the Bankruptcy Act 1967 and Rules, and one can consult a solicitor to take further actions. For further information, one can contact the nearest MdI's branch for advice or MdI's Complaints Unit directly.

Read more at: www.insolvensi.gov.my/faqs/bankruptcy
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answered on Feb 8, 2012 at 05:21
by   Dr Nigel Poon
edited Jun 20, 2016 at 05:11
 
ATTENTION TO ALL

May I suggest forumers here email the Director General of Insolvency (DGI), Malaysia Department of Insolvency (MDI) and recommended him to speed up the amendments for the process of automatic discharge for bankrupts. You may also give other suggestions of amendments so that bankrupts can quickly start afresh instead of getting stuck in their lives.

The DGI's name and email are given below. So let us now, all start writing our proposals/suggestions to him. Our email contents do not need to be perfect as long as they are written clearly and justifications put in to support what you say. This is really the right timing as the General Election is coming soon and moreover, the issue to amend the current bankruptcy law has long been discussed and therefore, it has now reached the time to deliver to the people. If we do NOT do anything now, things may not change easily without some efforts to email the DGI.

Datuk Abdul Karim Bin Abdul Jalil
Current Director General of Insolvency (DGI)
Email : abdkarim.abdjalil@insolvensi.gov.my


BELOW IS A RECENT ARTICLE, Deputy Finance Minister Datuk Donald Lim talked about the need for the Bankruptcy Act 1967 to be reviewed. We can also email Datuk Donald Lim to press him to speed up the current Bankruptcy Act amendments.

Lim: Review Act so that bankrupts get second chance

Monday January 16, 2012

Deputy Finance Minister Datuk Donald Lim

PETALING JAYA: The Bankruptcy Act 1967 needs to be reviewed to allow bankrupts to apply to be discharged from bankruptcy after three years and reduce the red tape involved in the clearance process.

Deputy Finance Minister Datuk Donald Lim said it was time for the Government to review the Act to encourage young entrepreneurs and more women to start their own bu­sinesses and give another chance to those who had failed in their business ventures.

“Bankrupts should be able to apply to be released or even automatically released in three years like in other countries instead of going through procedures that could cause unnecessary hardships,” he said.

He said that in Malaysia, a person had to wait five years before applying to be discharged from bankruptcy.

“A bankrupt has to apply through the Insolvency Department, which would need a letter from the bank or other creditors. Many find it difficult to be released by the creditors,” he said after giving a talk to members of the Malaysia Women’s Career Building Association yesterday.

Lim said businessmen who were declared bankrupt after taking a business risk should be released if the person’s financial history was clear from other debts to be able to start anew.
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answered on Feb 11, 2012 at 20:02
by   Anonymous
edited Jun 20, 2016 at 05:19
 
Yes, we all need to follow-up and write to Deputy Finance Minister Datuk Donald Lim to pursue this matter of our Malaysia Bankruptcy Act 1967 which is out-dated!

Deputy Finance Minister Datuk Donald Lim has been talking about this one year ago and today, he speaks the same thing but nothing has been done. He needs to walk the talk!
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answered on Feb 27, 2012 at 17:00
by   Miserable victim
edited Jun 20, 2016 at 05:21
 
May I know how soon will this proposal be tabled? Does it has to go thru the Parliament seating or something before it is approved, or can the Prime Minister approve this just like that? I've been suffering this enigma for almost 10 years already as a victim of situation and I really want a new life! I'm almost 40 and I don't have my own house and my own car under my own name. I really hope Prime Minister will approve this as soon as possible.
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answered on Mar 2, 2012 at 02:32
by   Albert Ding
edited Jun 20, 2016 at 05:24
 
@Miserable victim

Please email to the Director General of Insolvency above and ask him to help speed up the process as the proposed amendments to our current Malaysian Bankruptcy Law have been submitted to the Attorney-General for approval.

Alternatively, if anyone can do it, please do it soon or write to our PM's blog (Najib) to effectively voice it out once and for all.

Let us all do it!
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answered on Mar 2, 2012 at 19:47
by   Hassan Omar
edited Jun 20, 2016 at 05:28
 
@notalawyer

Appreciate if you are able to just email Datuk Abdul Karim Bin Abdul Jalil, the current Director General of Insolvency (DGI) Malaysia to inquire the status of the proposed amendments to the Malaysian Bankruptcy Act 1967?

I heard that the proposed amendments have been submitted to the attorney-general. The automatic discharge was proposed as the department believes making people, especially those who are honest & credible, a bankrupt for life will not benefit anyone.

"In many cases, it does not help them or their creditors as some of these people really cannot nor have the means to settle their debts. Some debtors are also untraceable. So what's the point of having them in our statistics? An automatic discharge will help them get back on their feet and start life afresh," DGI Datuk Abdul Karim Abdul Jalil told the New Sunday Times on 11 December 2011.

Under proposed amendments to the law, bankrupts will soon have an opportunity to start anew after five years. Debtors will have a lot of reasons to smile once the proposed amendments to the law are passed to enable bankrupts to be discharged automatically.

It is learnt that under the amendments, bankrupts may be automatically discharged after five years without having to apply to the courts or wait for the approval of the director-general of Insolvency (DGI), to be freed of the social stigma.

The Insolvency Department is seriously considering this move which is practised in many countries in order to give bankrupts a second chance to start anew.
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answered on Mar 5, 2012 at 13:59
by   One Voice Together
edited Jun 20, 2016 at 06:58
 
PM Najib said:

“I apologise for our mistakes prior to the 2008 general election. If we made mistakes in the past and the voters rejected us, we accept it.

“On behalf of BN, I apologise. We have learnt from our mistakes, and we aim and promise the people that we will make amends and bring them to greater heights.”
The first thing our PM Najib should amend is the proposed amendments (already submitted in 2011 to the Attorney-General for approval) to our current Bankruptcy Act 1967 so that all bankrupts could be discharged automatically from bankruptcy after a short number of years. This automatic discharge is one of the proposed amendments to the Bankruptcy Act 1967 which many feel out-dated and not keeping up with the changing trend in our lifestyle of today!
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answered on Mar 6, 2012 at 01:31
by   Johan Foo
edited Jun 20, 2016 at 07:00
 
I had tweeted our PM Najib just now. The tweet is copied below:

PM Najib, please help speed up proposed amendments to Bankruptcy Act 1967. The proposed already submitted to Attorney-General.
https://www.lawyerment.com/answers/questions/9018/good-news-automatic-discharge-for-bankrupts-coming-soon
You can also tweet, facebook or email/post our PM Najib at his 1Malaysia blog. Every little effort of yours goes a long way to build an ocean of voice/petition for a CHANGE to the currently "out-dated" Malaysian Bankruptcy Act 1967.

I am sure we want AUTOMATIC DISCHARGE for bankrupts after serving a number of years so that they are given a second chance to start afresh in their lives! It benefits no one of keeping them bankrupting for life. Let us now do our small part in voicing or petitioning to our PM Najib!
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