Bankruptcy Act of 1967

The Bankruptcy Act of 1967 clearly defines both what is bankruptcy and the procedure of the bankruptcy court in Malaysia. Passed on Sept. 30, 1967, the act was further amended in 1988.

Identification

Individuals may both file for bankruptcy in Malaysia or be involuntarily declared as bankrupt. Someone is forced into bankruptcy if he assigns his debts to a trustee, attempts to fraudulently pass off property or if that person attempts to delay payment to a creditor by leaving Malaysia.

Function

The act establishes the role of the court in the bankruptcy proceedings. First, the court issues a receiving order if an individual is deemed to be bankrupt. Then, there is a meeting of the individual's creditors and a public examination of the individual's funds. The judge then creates a scheme by which the bankrupt individual or his trustee is to pay back the creditors and then, when it is deemed the creditors have been paid back as established by the scheme, the bankrupt is officially discharged.

Significance

The act is also significant because it creates a director general of insolvency who oversees bankruptcy proceedings. The director general of insolvency serves as a go between for the debtors and the administrator of a bankrupt individual's estate. The director general of insolvency is appointed by the minister of finance.

References

• Malaysia Department of Insolvency: Bankruptcy Act 1967