PETALING JAYA: Selangor has emerged as the state with the highest number of bankruptcies among civil servants, with teachers identified as a particularly vulnerable group.
According to the Insolvency Department, 85 teachers in the state were declared bankrupt over the last five years.
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“Selangor recorded the highest number of cases compared to other states, based on the cumulative position of cases by state,” the department said in a response to The Star.
The scale of the issue extends beyond educators; between 2021 and 2025, a total of 687 civil servants in Selangor were declared insolvent.
Data indicates that the highest concentration of cases in that time involves those born in the 1970s and 1980s.
Among the 85 teachers, women represented the majority with 50 cases.
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Insolvency director-general Datuk Ishak Bakri noted that this pattern stems largely from heavy personal loan liabilities.
He explained that individuals with fixed incomes are often viewed as “Grade A” borrowers and approved for loans readily, yet they face great peril without prudent management.
National Union of the Teaching Profession secretary-general Fouzi Singon said teachers are often targeted for scams or peer-pressured into bad investments.
“Due to the nature of their profession, they are more prone to take out loans, become guarantors for their spouse or siblings, or join peer investment schemes.
“In the past, it used to be direct selling; now it has evolved into various forms of scams. Because they are such a close-knit group, if one teacher joins, the rest often follow suit,” he added.
Aliana David (not her real name), 55, a primary school teacher, believes graduate salaries are sufficient if managed well, but warns against living beyond one’s means.
Meanwhile, 34-year-old Jafari Jamil noted that while pay has improved, high urban living costs and a lack of hardship allowances in cities like Petaling Jaya create immense financial pressure.
Licensed financial planner Gunaseelan Kannan said many teachers belong to the “sandwich generation”, supporting both ageing parents and growing children simultaneously.
“On a fixed income, borrowing becomes a way to manage rising everyday expenses rather than indulgent lifestyles,” he said.
To combat this, experts suggest stricter vetting of loan applications by department heads and mandatory financial literacy workshops.
