KUALA LUMPUR: The amendments to the Insolvency Act, aimed to enhance the bankruptcy administration system in better protecting the welfare of bankrupt individuals, will come into effect beginning tomorrow.
According to Minister in the Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Said, the "second chance policy" aims to discharge from bankruptcy up to 130,000 individuals within a year.
"The number represents half of the cases being administered by the Insolvency Department.
"Through the enforcement of the Act, the bankruptcy administration is being improved by allowing the use of remote communication technology for meetings with creditors and incorporating the ability to send notices via electronic communication," she said in a statement.
She said, the mandatory first meeting of creditors had since been abolished as an initiative to expedite the administration process.
To protect the welfare of bankrupt individuals, the Act also reviews the capped value of bankrupt's property divisible among creditors and value for a case to qualify for summary administration.
"The enforcement of the Act reflects the government's commitment to ensure no one is left out of the country's development.
"This also proves that the government cares in giving a second chance to bankrupt individuals to live a better life and subsequently returning to contribute to the country's economic development."
Azalina said key amendments on the Act involved enhancement of provision for discharge, with Section 33C providing for automatic discharge within three to five years from date of a bankrupt's submission of his statement of affairs.
Section 33C applies retrospectively, covering individuals who had been formally declared bankrupt before the passing of this Act.
Meanwhile, Section 33B(2A) of the act deals with bankrupt individuals who qualify for a discharge from bankruptcy through a certificate of discharge issued by the Director General of Insolvency (DGI) by adding two categories, namely, a bankrupt who is incapable of managing himself and his affairs due to any mental disorder, as certified by a psychiatrist from any government hospital; and a bankrupt aged 70 years and above and in the opinion of the DGI, is incapable of contributing to the administration of his estate.