KUCHING: More than 245,000 Malaysians were declared bankrupts between 2007 and April this year, and out of this over 6,000 were from Sarawak.
Malaysia Insolvency Department (MID) state director Zalina Yacob said yesterday that the main cause for bankruptcy was failure to fulfil hire-purchase agreements.
She said this at a talk on ‘Second Chance for Bankrupts’ at Pustaka Negeri Sarawak here yesterday.
MDI state assistant director Latip Mohd, who also gave a talk, said it was easy to become a bankrupt in Malaysia – once a borrower or the guarantor (who is equally liable) has a debt of RM30,000 or more and failed to repay the loan, the financial institution or creditor can institute bankruptcy proceedings to get their money back.
He said when an individual is declared a bankrupt, he or she would be disqualified from, among others, holding public office or certain position in statutory bodies, registered societies or organisations or receive pension.
Their existing bank accounts would also be deactivated.
However, he clarified that there remained many things which a bankrupt could do, but with permission from the Director-General of Insolvency (DGI).
“With permission from the DGI, they are allowed to do business or even work in the business of relatives or family members, open a new account, or use their existing account and travel overseas.”
He added that a bankrupt could only use credit of up to RM1,000 on an existing credit card.
Zalina said bankrupts have a second chance to rebuild their lives so long as they collaborate with MID and repay their debts.
“We are committed to assist those who were declared bankrupt to continue their lives and pay back their debts on instalments continuously at the same time.
“All they have to do is approach us and work with us as we will do our best to facilitate and manage their insolvency affairs,” she added.
Latip said it was wrong to think that a bankrupt was not required to repay their debts.
“They still have to (pay) because bankruptcy does not prevent you from working, and putting efforts to repay is a second chance to eliminate debts,” he said.
MDI is a government agency that administers bankruptcy cases and bankrupts’ affairs.
The department also administers the winding up companies as well as administration of deregistered associations and trade unions.
MDI core activities include the discovery of asset, realisation of asset, ascertainment of debt, and distribution of payment to the creditor.