July 16, 2024

New Malaysia Times

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INSOLVENCY (AMENDMENT) ACT 2023 COMES INTO FORCE TOMORROW

KUALA LUMPUR, Oct 5 – The enforcement of Insolvency (Amendment) Act 2023 (A1695) will take effect from tomorrow, said Minister in Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said.

She said the enforcement of Act A1695 demonstrated the government’s concern to give bankrupt individuals a second chance to live a better life and then contribute to the country’s economic development.

“The enforcement of Act A1695 reflects the government’s commitment to ensure that no one is left out in the national development,” she said in a statement today.

On March 10, the Cabinet agreed with the proposed amendment to the Insolvency Act 1967 (Act 360) following discussions with stakeholders, including the Attorney-General’s Chambers; Office of the Chief Registrar of Federal Court; Finance Ministry; Bank Negara Malaysia; Inland Revenue Board; Employees Provident Fund; Credit Counselling and Debt Management Agency and the Association of Banks in Malaysia.

The key amendment involved in Section 33C of the law is aimed to assist bankrupt individuals to be discharged automatically between three to five years from the date on which the debtors submit the declaration of assets.

Azalina said that in line with the objectives of the second chance policy, the amendments to section 33C and subsection 33B (2A) of Act 360 are enforced retrospectively to bankruptcy cases administered before the enactment of Act A1695.

“The second chance policy aims to discharge up to 130,000 bankrupt individuals within a year after the Act A1695 comes into effect. The number represents half of the cases being administered by the Insolvency Department,” she said.

According to her, the amendment to the Insolvency Act 1967 has added two new categories of individuals who can be discharged through the issuance of a certificate from the director-general of the Insolvency without going through debtors’ objections under Section 33B (2A).

The inclusion of the two categories, namely individuals who cannot manage their personal affairs due to mental illness as defined in the Mental Health Act 2001 and those aged 70 and above, who, according to the Insolvency director-general’s discretion, are incapable of contributing to the bankruptcy administration.

To protect the welfare of bankrupt individuals, Azalina said the law also amended the value limit of bankruptcy assets that can be exempted from division among creditors and the value limit for the purpose of case eligibility to be administered in a simple administrative manner.

Through the enforcement of the law, the bankruptcy administration is being improved by allowing the use of remote communication technology for meetings with creditors and incorporating the ability to send notices via electronic communication, Azalina said.

She added that the mandatory first meeting of creditors had since been abolished as an initiative to expedite the administration process.

— BERNAMA