Bankruptcy Amendment Bill 2016

The Bankruptcy (Amendment) Bill 2016 which was approved in the Dewan Rakyat on March 29, which among other things, provides bankruptcy protection to social guarantors, was passed by the Dewan Negara yesterday.

Minister in the Prime Minister’s Department Azalina Othman Said, when winding up debate on the bill, said under the amendments of the act, social guarantors cannot be declared bankrupt because they did not profit from it (loan) but guaranteed individual loans on humanitarian grounds.

“They become victims when out of sympathy they become guarantors for other people but when the borrower doesn’t pay someone else (guarantor) pays the price. The government is aware of this and believe they should no longer be penalised. So, with this bill, guarantors will be protected,” she said.

However, she said the social guarantor would still be facing other legal processes to prevent them from abusing the amendments to the act.

According to Azalina, under the bill, the maximum amount for bankruptcy is raised to RM50,000 from RM30,000 previously.

She said the amount is deemed apt for the time being and could possibly be raised in future amendments.

Earlier, the debate on the bill attracted the attention of 15 senators including Senator Rahimah Mahamad, Senator Mustapa Kamal Mohd Yusoff, Senator Azizah Harun and Senator Siti Aishah Shaik Ismail.

Siti Aishah, in her debate, asked the government to consider giving flexibility to individuals declared bankrupt to enable them to perform the Umrah or Hajj.

“They should be given the flexibility and I hope the government will look into the matter,” she said.

Earlier, Deputy Minister in the Prime Minister’s Department Razali Ibrahim, when tabling the bill for second reading, said the government would consider eight policy changes to amend the bill including barring action to make social guarantors bankrupt and raising the minimum for bankruptcy.

The bill was approved without any amendment.