Bankruptcy - Main Cause

Leading an extravagant lifestyle is one of the root causes of bankruptcy among fresh graduates today, says Credit Counselling and Debt Management Agency CEO Azaddin Ngah Tasir. He said there were graduates who thought nothing of swiping their credit cards in order to acquire the latest gadgets, cars, fashion or embark on holidays.

Having just graduated and found a job, the generation aged below 30 embarks on a lavish lifestyle to keep up with peers. Such a journey without proper financial management only leads to massive debt and eventual bankruptcy.

As of April 30 this year, 15 per cent of the 429,588 clients seeking advice from the agency were individuals aged between 20 and 30. 75 per cent of these individuals made below RM4,000 every month, while about 52 per cent had no clue about how to manage their own finances.

Only 150,706 people attended the credit management program. Of these, about 80 per cent repaid their debts after it was restructured by the agency. The balance failed due to a “lack of discipline and resolve.

Credit card debts consist about 70 per cent of the cases, followed by personal loans at 15 per cent and car and housing loans at 6 per cent.