In March 2017, our Parliament passed the Bankruptcy (Amendment) Bill 2016 that officially made it more difficult for people to become bankrupt!
Here are some highlights of the new law.
#1 For starters, they swapped out the word “bankruptcy” for the word “insolvency” in all proceedings.
Essentially, “insolvency” means that you don’t have enough money to pay your debts, while “bankruptcy” is a status you achieve when the court declares you officially broke!
#2 A social guarantor will no longer face bankruptcy
According to our de facto Law Minister, Datuk Seri Azalina Othman, this change is important to address the unfair treatment of social guarantors.
Social guarantors are basically the people who promise to tank the responsibilities of the debt if their friend/family fails to repay the debt.
Before the amendments, many of these people ended up as bankrupts after their friends/family members failed to repay their loans.
And according to our Minister that’s super unfair!
#3 “Hold it there! Let’s make a deal!”
Under the new Section 2c(1) Insolvency Act 1967, a debtor can now “propose a voluntary arrangement to his creditors any time before he is adjudged bankrupt.”
In other words, you now get a chance to negotiate with your creditor before you are officially a bankrupt!
Just make sure you don’t deal with the Sharks from Shark Tank. That’s a tough bunch.
#4 Now you need to owe RM 50,000 to be sued for bankruptcy!
Previously it was RM 30,000.
#5 They will need to personally inform you of your bankruptcy in order for the bankruptcy to be legit.
Unless they can show that you were avoiding it, like how you avoided your curious relatives at family gatherings.
In the old Bankruptcy Act, particularly Section 3(2), you can be declared bankrupt as long as the notice was sent to you in a “prescribed manner “, which does not necessarily involve a personal service of the notice. So you can actually come home from some holiday and suddenly realize that you’ve become a bankrupt.
And these are merely a few notable changes in the new Insolvency Act!
There are so many other substantial and procedural changes that have been made that fundamentally changes how insolvency and bankruptcy is done in Malaysia.
In fact, the same applies to the recently amended Companies Act 2016. Something we have covered some time ago here on The CanLaw Report too.
Read more: How the new Companies Act changes everything
This is why our friends at CLJ is organizing a seminar on 27 March 2018 to help you understand the many changes in the new Insolvency Act and Companies Act.
3 very highly qualified thought leaders in these areas will speak about the topics:
- Ariff Hakimi Abdul Hamid, who is the Director of the Kedah Insolvency Department will be giving the opening keynote.
- Khoo Kay Ping, Partner at Zaid Ibrahim & Co will be giving us a break down of the substantive reforms that has taken place in Malaysian bankruptcy law.
- Gavin Jay Anand Jaypal, Principal at Gavin Jaypal will be sharing about the new procedures in filing for Bankruptcy as well as a run-through on the changes in the new Companies Act 2016.
It is a full day seminar at Eastern & Oriental Hotel in Penang!