Bankruptcy cases on the rise in Malaysia

KUALA LUMPUR: Most incidents of bankruptcy in Malaysia arise from the sale and purchase of vehicles, making up 26.54% of the total cases between 2007 and this year.

Minister in the Prime Minister's Department Nancy Shukri said some 33,570 Malaysians were declared bankrupt within that period after they faced problems involving vehicle sales transactions.

"The second cause of bankruptcy is housing loans. This shows that bankruptcy may not necessarily be due to the challenging economy but because of the personal needs of the people," she said during question time in Parliament Wednesday.

Nancy said the economy was only the top fourth reason for bankruptcy while the third factor was problems in personal and business loans.

She said according to the Insolvency Department, the total number of bankrupts as of December last year was 253,635.

The department's records showed that the number of bankruptcy cases was consistently increasing from 13,238 in 2007 to 13,855 in 2008, 16,228 in 2009 and 18,119 in 2010.

Even though the number decreased to 16,167 in 2011, it rose again to 19,525 in 2012 and 21,987 in 2013.

Nancy said bankrupts aged below 25 totalled 1,895 between 2007 and this year, comprising only 1.5% of the total cases. There were 25,552 cases involving those aged between 25 and 34, she added.

On efforts by the Government to combat bankruptcy, Nancy admitted that conducting outreach programmes was not sufficient.

"However, we aggressively carry out programmes that are targeted at specific groups, including single mothers, who may have been left or cheated by their husbands and are forced to settle debts they never took in the first place," she said.

She added that the Government was also in the midst of drafting a law to give a second chance to bankrupts but could not elaborate further on this move.