Around 60 people below 44 declared bankrupt each day

PUTRAJAYA: Each day, 60 people aged between 35 and 44 years are declared bankrupt, which makes them the highest out of the total number (34%).

This group is followed by those aged 45-54 (26%), 25-34 (20%), and 55 and above (11%).

Minister in the Prime Minister's Department Nancy Shukri said up to September this year, 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.

Present was Malaysia Department of Insolvency (MdI) director-general Rohana Abd Malek.

She said since MdI was established until September this year, 251,209 people were declared bankrupt and out of this, only 28% 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% (52,535) and 32.97% (38,407) respectively compared to the Indians who formed 12.63% (14,710) and other races making up 9.30% (10,836).

Based on categories (2007-2013), car loan defaulters recorded the highest number of bankruptcy cases at 30,451 (26.14%), followed by housing loan defaulters at 20,529 (17.62%), personal loan defaulters at 18,053 (15.50%) and business loan defaulters at 14,431 (12.39%).

The MdI statistics also show that credit card debts made up 4.18% (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."

Between January and September 2013 alone, 27,432 bankruptcy petitions were filed in court.

"Out of this number, 99.2% (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," Nancy said.

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