PETALING JAYA: The Insolvency Department has revealed that 16 people declared bankruptcy every day in 2022 mainly involved those who were maintaining their personal or business loans.
Eventhough 5,695 bankruptcy cases were recorded last year, the total amount of people was still lower than in 2021 with 6,554 cases which were also due to an amendment to the Insolvency Act on Sept 20 2020 that raised the bankruptcy threshold from RM50,000 to RM100,000, NST reported.
The nation’s bankruptcies have reduced steadily from 16,000 cases in 2018 to 6,000.
“The total number of bankruptcy cases administered for the period of 2018 to December 2022 was 49,133.
“A total of 16 petitions were filed every day in 2022 and 16 cases registered daily in the same year,“ the Insolvency department said.
The age groups that declared bankruptcy were almost 40 per cent for 35 to 44 years old whereas 29 per cent of cases reported were those aged 45 to 54 years old.
The Insolvency Department stated that nearly half of said cases registered were from personal loans while 22 per cent were due to business loans.
Meanwhile, the numbers have also indicated that nearly 70 per cent, or 3881 bankruptcies, had a debt threshold between RM100,000 and RM499,000 and its amount had surged from 1,572 cases last year.
Weighing in on the numbers, financial expert Professor Dr Mohamad Fazli Sabri, who is also Universiti Putra Malaysia’s Faculty of Human Ecology dean, said that businesses reopening after the Covid-19 pandemic may be the reason for improving Malaysia’s bankruptcy cases.
He also did express concerns over the high amount of bankruptcies with a debt of RM100,000 to RM499,000.
“The data shows promising progress, probably because we have started to resume our businesses, and also maybe this could be the result of our government’s intervention and financial programmes.
“But I am still quite worried about the numbers of those with debts of RM100,000 to RM499,000. I think we need to know who these people are and see how we can intervene to help them manage their debts,“ Fazli said.
He advised Malaysians to avoid taking up new loans and carefully examine their capabilities to use their existing loans if there is an urgent need for a new one.
“They need to make sure that their service ratio or payment commitment does not exceed 30 per cent, or one third, of their income.
“Avoid Ah Long (loan sharks), illegal money lenders and get-rich-quick schemes. Instead, seek advice from experts, such as certified financial planners and agencies, such as the Credit Counselling and Debt Management Agency,” he added.
