KUALA LUMPUR: The Congress of Unions of Employees in the Public and Civil Services (Cuepacs) has urged all heads of departments to address the rising issue of bankruptcy among civil servants.
Its president, Datuk Adnan Mat, said this call aligns with the second chance policy on bankruptcy to those aged 40 and below who have debts not exceeding RM200,000.
Adnan said that the policy can help prevent civil servants from remaining trapped in bankruptcy as currently 3,265 out of 6.3 million civil servants are still listed as bankrupt.
"Although the number is relatively small, the impact of bankruptcy can severely affect productivity.
"Therefore, we urge all department heads, especially those in the Integrity Department to take proactive measures to prevent civil servants from falling into bankruptcy.
"The second chance policy should help ensure they do not remain in this status for too long," he told media at the press conference today.
Cuepacs also advises civil servants to manage their finances wisely to avoid accumulating new debts that could lead to bankruptcy.
"The government's initiatives provide some relief for those burdened with significant debts, offering a way out of bankruptcy under specific conditions," he said.
Last year, the government announced the second chance policy, which aims to release around 130,000 bankrupt individuals, allowing them to continue with their lives and contribute to the country's economic development.
This was achieved through the amendment of Section 33C of Act 360, which enables bankrupt individuals to be released from insolvency within three to five years from the time they submit their statements.
Adnan added that Cuepacs warmly welcomes the second chance policy as it provides individuals with the opportunity to rebuild their lives.
"At the same time, they can reorganise their financial status, which surely brings relief to civil servants given this opportunity, enabling them to provide a better life in the future.
"Those under the age of 40, in particular, face many challenges early in their careers. This policy allows them to rebuild and improve themselves so they can continue to be civil servants who provide the best public service delivery to the people."
He said many civil servants facing financial issues failed to plan properly and had high commitments.
"Living in the city with a low basic salary often means they cannot afford much. As a result, they take on personal loans to provide for their families, such as paying for housing deposits.
"Ultimately, they struggle to manage the situation due to the high cost of living in the city.
"They may get caught up in trying to provide better facilities without realising that the cost of living is continuously increasing. Many failed to manage their finances properly in the beginning."