Lim: Youths made bankrupts need second chance

PETALING JAYA: Youths and guarantors who are made bankrupt deserve a second chance and the amendments to the bankruptcy laws are timely, says former deputy finance minister Datuk Donald Lim Siang Chai.

Too many young people, he said, were getting themselves into financial difficulties.

“Making someone bankrupt, especially those below 40, should always be a last resort,” said Lim, who also supported the move to allow a bankrupt to be discharged after three years.

He added that it was very unfair to automatically make guarantors bankrupt when borrowers defaulted.

Lim said lenders should exhaust all avenues to recover money from borrowers before going after the guarantors.

“Often a spouse will stand guarantor for the other. To declare both husband and wife bankrupt can destroy a family,” he said.

During his tenure as deputy finance minister, Lim had said that special attention should be given to youths to prevent them from going bankrupt.

He pointed out then that the Government had viewed bankruptcy among youths as a serious problem for the whole country.

Former businessman Yusoff Mohsin, 65, said his life was ruined after he stood guarantor for his older brother’s company over 25 years ago.

Yusoff said the company was a government supplier and his brother defaulted on a RM200,000 loan.

“The amount was not much but as a guarantor I suffered a lot of collateral damage,” he said.

Yusoff said he had debts of his own at the time and it doubled overnight after he was made responsible for what his brother owed the bank.

“I couldn’t pay my own house and car loans or credit cards,” he said.

Yusoff, who lives with his family in Petaling Jaya, said being made a bankrupt also crippled his business. He never recovered financially.

He said the previous bankruptcy procedures lacked empathy for those affected and a complete overhaul of the law was overdue.

The amendment, however, comes too late for Yusoff unless the Government discharges all bankrupts who are senior citizens.

“I am resigned to the fact that I will die a bankrupt,” he said.