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Transcript of LRM BARU
bankcruptcy law in malaysia governed by Bankruptcy Act 1967
2 ways in which a person may be discharged from bankruptcy.
order of court sec 33
discharged by DGI sec 33A
head of the International Monetary Fund - crucial need to sort out personal, corporate
average 41 individuals were declared bankrupt every day(DGI Datuk Karim,2011)
defects in 2 different perspectives.
bankrupt in Malaysia will have to wait for a long time to get the bankruptcy status lifted.(Deputy Finance Minister, Datuk Donald Lim)
no provisions under the Act concerning pre-bankruptcy rehabilitation measures. (Noorfajri ismail, 2011)
inefficiency in bankruptcy administration which incurred higher cost and there is also
problem relating to unsecured interest on part of the creditors
governed by separate statutes Automatic Discharge for Bankruptcy: Reviewing Bankruptcy Act 1967
in Malaysia Cartaz Ummu Hani bt Jaiman
Nur Akmar Shamira bt Shamsudin
Noor Fadhlin bt Mohd Fuad
Zaidatul Aqilla bt Mohd Zainuddin Automatic Discharge in Malaysia: Reviewing Bankruptcy Act 1967 Cartaz Ummu Hani bt Jaiman
Nur Akmar Shamira bt Shamsudin
Noor Fadhlin bt Mohd Fuad
Zaidatul Aqilla bt Mohd Zainuddin Non-legal
bankrupt faces social stigmatization such as embarrassment and low self esteem (Jim Desantis)
bankruptcy prohibits certain employment possibilities such as promoting, forming or managing a company ( John King, 2004)
bankrupt is also restricted to overseas travel (John King,2004)
This research paper provides:
a review of bankruptcy laws and proceeding in discharging a bankrupt in Malaysia.
to identify the problems and complexities that contained in the act and offer a relief by way of automatic discharge.
outline a comparative study in other jurisdiction such as Australia and UK by suggesting in reforming our existing law. To analyze the applicability the automatic discharge.
To study the functions of BA and MdI towards the loopholes in its functionality.
To review the existence of their power.
To review the procedure.
To compare legal provisions, principles and institutions of other countries such as UK and Australia. Research Objectives Research Methodology 6steps involved:
Research Approach : Mix method = 2 Techniques used
Sources of Data = raw data + targeted person + HeinOnline, Lexis Nexis Malaysia, CLJ and etc.
Sampling= cooperate with otr authority + classifying acc to their category +
Research instrument : field-research interview + target group + questionnaire + survey
Data management : permission + recording + credibility
Data analysis : making comparison + simple counting techniques = statistics Scope of Research
(Delimitation) Analysing the law:
From Malaysia: s.33 of Bankruptcy Act 1967
Analysing the law in comparing with:
UK :Entreprise Act 2002(Chris Brockman, 2004)
Australia: Bankruptcy Act 1966 (John King, 2004)
Singapore: Singapore Bankruptcy Act (Noorfajri Ismail,2011)
1. Lack of prior research studies
2. Difficulty in having access to the important people and organization
3. Time constraint Significance
The importance of this research are :
To enable a debtor to make a fresh start as soon as he is discharged by the court. (Gita Radakrishna, 2012)
Minimizing the administrative cost of bankruptcy. (Noorfajri Ismail,2011)
Lengthy Procedure. (DGI,Datuk Abdul Karim Abdul Jalil,2011) Literature review General: history
previously applying the forgiven unconditionally in a passage of 5 years.(Efrat,2002).
The, major reforms made based on several relevant Acts in order to govern the procedure and requirements toward s the automatic discharge.( Cordry,1998)
Bankruptcy Act 1966
History and development of bankruptcy law. Bankruptcy Act 1924 – Bankruptcy Act 1966
Australian Bankruptcy Act 1966 is an act of rehabilitation - discharged from bankruptcy after 3 years. (Insolvency and Trustee Service Australia)
period of discharged depends on the bankrupt’s behavior during the bankruptcy period. (section 149A, Bankruptcy Act 1966)
The fresh start policy= one of the competing objectives in bankruptcy law (Hayek, 1967).
early discharged was introduced in the Bankruptcy Amendment Act 1991
UNITED STATES :
Govt being a Debtor at first in concerning the personal Bankruptcy then, they introduced an Injunction(Cordry,1998).
Giving a fresh-start to the bankrupts by ensuring it fairs to all parties. (Mate,2004).
In furtherance of s.521, automatic dismissal requirement in US are more tolerable and flexible. (Valiunas, 2011)
Based on Bankruptcy Act 1988 and later amended by Civil Law((Miscellaneous Provisions) Act 2011.
Period to discharged bankrupt: 12 years reduced to 5 years.
Proposed new Bills for automatic discharge of 3 years to be applied.
Step must be taken for a new amendment to our existing Bankruptcy Law.(Noorfajri Ismail,2011)
2005 – June 2012=243,823 people bankrupt
timeline for an automatic discharge should be introduced. Supported by Fomca Deputy President, Muhammad Sha’ani Abdullah.
A period of two to three years is ample as a bankrupt should be given a second chance to re-build their lives.(Sharnaaz Habib,2012) References Noorfajri Ismail,Bankruptcy Law As Balancing The between Creditiors and Debtors in MALAYSIA : A NEED FOR LAW REFORM, 2011, CLJ
P.Selvarani, News Straits Times : Second Chance. Dec 11, 2011
King,J Moving Beyond The Hard-Easy Tug of War : A Historical, empirical, and the-Oretical Assesment of Bankruptcy Discharge,Dec 2004.
Gita Radakrishna, Rethinking Insolvency Laws in the Malaysian context : Journal of Southeast Asian Research : Vol 2012.
Brockman,C Bankruptcy A Fresh Start? : New Law Journal 2004 AUTOMATIC DISCHARGE FOR BANKRUPTCY: Reviewing Bankruptcy Act 1967 in Malaysia cartaz Ummu Hani Jaiman
Nur Akmar Shamira Shamsudin
Zaidatul Aqilla Mohd Zainuddin
Noor Fadhlin Mohd Fuad
Malaysia Bankrupt law Bankrupt Act 1967
It is observed that some features of the Malaysia Bankruptcy law and procedures are cumbersome and complex compared with other jurisdiction such as Singapore, Australia and also United Kingdom (Noorfajri,2011)
One of the complexities contained in the Act is with regard to the process of discharging the bankrupt.(Shahanaaz,2012) Discharge procedure in present law : 3 alternative
Annulment or rescission of the bankruptcy order by the court
Discharge order by the court
Discharge by certificate issued by Director General of Insolvency upon application made by the debtor
Problem in the current system:
- time consuming (Noorfajri,2011)
- too technical (Radhakrishna,2012)
Solution : Implement the procedure of automatic
This paper provide a review of bankruptcy law and proceeding in Malaysia and the need to implement an automatic discharge in our country.