{"id":4948,"date":"2023-10-09T09:35:10","date_gmt":"2023-10-09T01:35:10","guid":{"rendered":"https:\/\/yhalaw.com.my\/?p=4948"},"modified":"2024-09-09T09:11:32","modified_gmt":"2024-09-09T01:11:32","slug":"insolvency-act-1967-a-fresh-financial-start-the-evolution-of-bankruptcy-provisions-in-malaysias-insolvency-act","status":"publish","type":"post","link":"https:\/\/yhalaw.com.my\/my\/insolvency-act-1967-a-fresh-financial-start-the-evolution-of-bankruptcy-provisions-in-malaysias-insolvency-act\/","title":{"rendered":"INSOLVENCY ACT 1967 \u2013 A FRESH FINANCIAL START: THE EVOLUTION OF BANKRUPTCY PROVISIONS IN MALAYSIA\u2019S INSOLVENCY ACT"},"content":{"rendered":"<p><strong>The main intent of the recent amendment to Insolvency Act which came into force on 6.10.2023 is to provide individuals with a chance for a new beginning. Everyone can encounter financial difficulties and these updated provisions aim to ensure that a person facing bankruptcy is not perpetually weighed down by prior financial missteps or unexpected hurdles.<\/strong><\/p>\n\n\n\n<p><strong>Introduction<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Bankruptcy in Malaysia is governed by the Insolvency Act 1967 which recent amendment has come into force on 6.10.2023.<\/li>\n\n\n\n<li>A person can be made a bankruptcy by a court order if they are unable to pay their debts of RM100,000.00 and above.<\/li>\n\n\n\n<li>There are several ways a bankruptcy may be discharged as follows:<\/li>\n\n\n\n<li>Annulment;<\/li>\n\n\n\n<li>Application to court;<\/li>\n\n\n\n<li>Discharge by Director General of Insolvency (\u201c<strong>DGI<\/strong>\u201d); and<\/li>\n\n\n\n<li>Completion of Bankruptcy Duration of 3 Years from the Date of Submission of Statement of Affairs (Automatic Discharge)<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Annulment<\/u><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Happens when the bankruptcy order should not have been made in the first place or when the debt is paid in full.<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Application to Court<\/u><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>An application to court can be filed at any time after he is being adjudged bankrupt.<\/li>\n\n\n\n<li>The application must be supported by a report from the DGI as to the bankrupt\u2019s conduct and affairs.<\/li>\n\n\n\n<li>When considering the application, the court will weigh between the rights of creditors to recover their debt with the bankrupt individual\u2019s opportunity for a fresh start, taking into account the broader interest of public commercial reality.<\/li>\n\n\n\n<li>Several key factors will be taken into consideration:\n<ul class=\"wp-block-list\">\n<li>The bankrupt\u2019s age and earnings;<\/li>\n\n\n\n<li>Health conditions;<\/li>\n\n\n\n<li>Length of time of the bankruptcy;<\/li>\n\n\n\n<li>Reason leading to bankruptcy;<\/li>\n\n\n\n<li>The proportion of debt settled;<\/li>\n\n\n\n<li>Behaviour of the bankrupt;<\/li>\n\n\n\n<li>Actions of the creditors; and\/or<\/li>\n\n\n\n<li>The count of creditors in opposition.\n<ul class=\"wp-block-list\"><\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Discharge through DGI<\/u><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Starting 1.10.2003, the DGI is granted the authority to discharge when there is an application by the bankrupt.<\/li>\n\n\n\n<li>This application can be submitted after a duration of 5 years after the date of the bankruptcy order.<\/li>\n<\/ul>\n\n\n\n<p><strong><u>Completion of Bankruptcy Duration of 3 Years from the Date of Submission of Statement of Affairs (Automatic Discharge)<\/u><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>This is introduced in the <em><u>Insolvency (Amendment) Act 2023 (Act A1695)<\/u><\/em> which came into force on 6.10.2023.<\/li>\n\n\n\n<li>A bankrupt is automatically discharge on the expiration of 3 years from the date of the submission of the Statement of Affairs if the bankrupt has complied with all obligations and there is no objection from the creditors.<\/li>\n\n\n\n<li>Application for objection by the creditor(s) must be filed in the court.<\/li>\n<\/ul>","protected":false},"excerpt":{"rendered":"<p>The main intent of the recent amendment to Insolvency Act which came into force on 6.10.2023 is to provide individuals with a chance for a new beginning. Everyone can encounter financial difficulties and these updated provisions aim to ensure that a person facing bankruptcy is not perpetually weighed down by prior financial missteps or unexpected hurdles.<\/p>","protected":false},"author":1,"featured_media":4950,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[3576],"class_list":["post-4948","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-updates","tag-insolvency-act"],"_links":{"self":[{"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/posts\/4948"}],"collection":[{"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/comments?post=4948"}],"version-history":[{"count":1,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/posts\/4948\/revisions"}],"predecessor-version":[{"id":4951,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/posts\/4948\/revisions\/4951"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/media\/4950"}],"wp:attachment":[{"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/media?parent=4948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/categories?post=4948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yhalaw.com.my\/my\/wp-json\/wp\/v2\/tags?post=4948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}