PUTRAJAYA: The Insolvency Department is in the midst of drafting several amendments to the Insolvency Act 1967 (Act 360) to improve the bankruptcy administration system including the adoption of the amendments in previous bankruptcy cases.
Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said said among the proposed amendments was the setting of time limits for the filing of Proof of Debt Forms by Creditors (Section 42 and Schedule C of Act 360) to avoid the issue of late filing which could make it difficult to discharge bankrupt individuals.
ALSO READ: If you can’t pay a debt of RM100,000, you can be declared a bankrupt
Another suggestion is to make improvements to the automatic discharge provisions under Section 33C of Act 360 so that bankrupt individuals can be discharged from bankruptcy in a shorter period.
"Also being considered is enabling the use of information technology and long-distance communication in the administration of bankruptcy cases to facilitate the customers, stakeholders and the department,” she said in a statement here on Friday (Feb 3).
She said another suggestion is to make improvements to section 42 and Schedule C of Act 360 by abolishing the obligation to hold the first meeting of creditors so that the bankruptcy administration can continue immediately.
Azalina said the government is also mulling over the possibility to add a category of cases that can be discharged through the Insolvency Director-General’s Certificate of Discharge (IDG Certificate) without objection by creditors to bankrupt individuals aged 70 and above.
ALSO READ: Higher threshold is worrying
The category of cases that can be discharged using the IDG Certificate is also proposed for bankrupt individuals who are incapacitated because they have been diagnosed as mentally ill under the Mental Health Act 2001.
The minister said an engagement session with stakeholders to discuss matters related to proposed amendments will be held on Feb 7.
"The proposed amendments to the Insolvency Act 1967 are expected to be tabled to the Cabinet soon after the engagement session with the stakeholders,” she said.
Azalina also said that the total number of bankruptcy cases registered from 2018 until 2022 was 49,133 cases, 5,695 of which were in 2022 alone.
"The total number of bankruptcy cases discharged by the IDG Certificate under Section 33A of Act 360 in the same period was 87,427 cases.
"Based on 2022 statistics, an average of 16 bankruptcy cases are registered every day. However, the total number of bankruptcy cases discharged through the IDG Certificate for the same period is an average of 27 cases per day,” she said.
Azalina added that the economy, finance, legislation and society were important elements in the formulation of Malaysia Madani policy and that the government was aware of the challenges faced by bankrupt individuals and the stigma of bankruptcy in society. - Bernama