Government / Public Policy

Insolvency Dept lists 3 conditions to start process of bankruptcy discharge

KUALA LUMPUR: The Insolvency Department has listed three conditions for it to start the process to discharge bankrupt individuals under the government's latest initiative to give a second chance to insolvents with small debts.

Minister in the Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said said the first condition applied to those whose bankruptcy declaration had surpassed five years from the date of the acceptance order and the bankruptcy order.

"Second, the amount of outstanding debt does not exceed RM50,000.

"Third, there is no court order, court proceeding and/or investigation being carried out on the insolvent under the Insolvency Act 1967 which will prevent the Insolvency Department director-general to release the person from one's bankruptcy status," she said in a statement today.

Azalina said those who fulfilled these conditions could apply for the release at their respective Insolvency Department's branches managing their case.

"They can send a letter or email to the department to check their case status," the minister said, adding that this was in line with the recent initiative to start releasing insolvents with small scale debts from bankruptcy starting from Wednesday (March 1).

Insolvents can get more details on the department's official website.

Azalina also encouraged insolvents to look through the frequently asked questions regarding the discharge of bankrupt available on the website.

While tabling the 2023 Budget last Friday, Prime Minister Datuk Seri Anwar Ibrahim said the government would amend the Insolvency Act 1967 to enable bankrupts to be freed automatically from bankruptcy soon.

He said as of January this year, there were more than 260,000 bankruptcy cases recorded, with the majority from the Malay community who have the potential of contributing to the nation's economy.

Anwar said the government estimated that 130,000 people to be freed from the bankruptcy status when the amendments were passed.

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