Wednesday, April 9, 2014

Bankruptcy cases rising, warns minister

April 9, 2014
Last year, over 20,000 individuals were declared bankrupt, almost double from 2007.
Nancy Shukri'sKUALA LUMPUR: Bankruptcy cases in Malaysia have gradually risen from 2007 to 2013, with 21,987 individuals declared insolvent last year, the Dewan Rakyat was told today.
Minister in the Prime Minister’s Department Nancy Shukri told the House that the number of individuals declared bankrupt in 2013 was almost double that of 2007, but downplayed the role of the economy in pushing these Malaysians into the red.
“As of December 2013, there have been 253,635 people declared bankrupt. And from 2007 to 2013, there were 122,169 individuals declaring bankruptcy,” she said during question time in response to a question from Johari Abdul (PKR-Sungai Petani)
“In 2007, there were 13,238 cases; in 2008 there were 13,855 cases; in 2009 there were 16,228 cases, in 2010 there were 18,119 cases, in 2011 we had 19,167 cases, in 2012 19,575 cases and in 2013, there were 21,987 cases of individuals declaring bankruptcy.”
She said that the main cause for bankruptcy was due to vehicle loans (26.5%), adding that from the year 2007 to 2014, there were a total of 33,570 individuals who had defaulted. This was followed by housing loans, personal loans and business loans, respectively.
“So I don’t think the reason for their bankruptcy is economic difficulty, but personal needs. If we look at the economic aspect, it is in fourth place among the list of reasons found by the ministry’s study,” said Nancy.
She also dismissed the misconception that youths below 25 years of age formed the bulk of bankruptcy cases; statistics revealed that from 2007 to 2014, only 1.5%, or 1,895 were individuals below the age of 25.
The minister added that she was personally taking it upon herself to tackle the growing problem by reducing the figures or, at the very least, spreading awareness.
“Based on statistics, there is an increase in bankruptcy cases registered at the department from 2007 to 2013…the government through the Department of Insolvency (MDI) has run outreach programmes to inform the people, provide exposure and raise awareness on insolvency,” said Nancy.
“In 2013, we had 124 outreach programmes targeting the public, including civil servants, the private sector, students, the police and the army.”
Nancy said that studies by the ministry showed that the programmes were bearing fruit: awareness was on the rise as queries from the public on bankruptcy increased by 74% in 2013 compared to 2012. In 2013, 8,027 individuals turned to MDI, as opposed to 4,612 in 2012.
“The number of bankrupts present in the MDI has also increased by 37%, with 50,912individuals in 2013 compared to 37,625 in 2012.
“This clearly proves that the government has and is taking the right steps. But we won’t stop here, and are committed to increasing awareness on the issue of bankruptcy,” she said.
Nancy added that the ministry was now focusing on single mothers, who were often abandoned by their husbands and burdened by debts that were not theirs.
~ Free Malaysia Today

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