Malaysian Bankruptcy Law

The system for declaring and processing bankruptcy in Malaysia is based on English law and is laid out in the Bankruptcy Act of 1968. Bankruptcy law in Malaysia focuses on the debtor's insolvency, or how unlikely it is that he is able to pay off his debts.

The Bankruptcy Act of 1968

The Bankruptcy Act of 1968 established voluntarily and involuntary bankruptcy, initiated when the court gets an order declaring bankruptcy. The creditors review that person's assets and summarize them in court, where a judge creates a repayment plan, with the person or the trustee agreeing to repay the debt.

Director General of Insolvency

The Director General of Insolvency reports to the Minister of Finance in bankruptcy matters, serving as a liaison between debtors and creditors. The Director General is expected evaluate the insolvency in light of the debtor's expected income over the repayment period, and not at the debtor's current income.

Amendments

The 1967 act was amended in 2003 to require creditors petitioning for a debtor's bankruptcy to prove that they had tried all other methods to recover debts owed before motions for bankruptcy were filed. The act also raised the minimum debt owed for declaring bankruptcy from RM10,000 to RM30,000. (As of October 2010, one Malaysian ringgit is the equivalent of 0.3239 U.S. dollars.)

References

• MalaysianGov: Bankruptcy
• Yeenl: Bankruptcy
• InsolvencyReq: Malaysia

Resources

• InsolvencyGov: Bankruptcy Act 1967