SELANGOR continues to top the nation’s bankruptcy statistics, with teachers featuring prominently among affected civil servants, according to Malaysian Department of Insolvency director-general Datuk Ishak Bakri.
He attributed the trend largely to heavy personal loan obligations, noting that findings from insolvency data and financial literacy initiatives carried out by the department in Selangor indicate fixed-income earners face a higher risk of falling into bankruptcy.
“Those with stable salaries, such as teachers, tend to find it easier to secure personal loans, but problems arise when these financial commitments are not managed responsibly,” he said, adding that unchecked borrowing can result in prolonged financial strain.
Ishak was speaking to the media after launching the Financial Literacy Programme with Institutions of Higher Learning at Politeknik Merlimau Melaka (PMM) on Monday.
He also revealed that about 200,000 individuals were released from bankruptcy last year, exceeding the government’s key performance indicator.
According to him, Malaysia’s insolvency framework has shifted away from a punitive approach towards one that prioritises welfare and recovery, in line with the government’s “second chance” policy.
“One of the major reforms was the 2023 amendment to the Insolvency Act, which allows the Director General of Insolvency to discharge bankrupt individuals without requiring a court order, provided they meet the criteria under the Second Chance Policy,” he said.
He added that those eligible for discharge include individuals aged over 70, cases that have dragged on for an extended period, and persons certified as having mental health conditions. —Jan 19, 2025
Main image: MAGIC Consultancy
