Thursday, 14 October 2010

Bankruptcy in Malaysia

At least 500 people who take out hire-purchase loans for vehicles are declared bankrupt every month.

The majority, comprising 37% (950) of the 2,565 cases in the first five months of this year, were aged between 35 and 44 years.

Insolvency Department director-general Datuk Abdul Karim Abdul Jalil told The Star the incidence of bankruptcy from unserviced car loans was extremely high in the first five months of the year, an average of 513 cases a month.

He said this was in contrast to the average of 330 cases a month last year, 227 in 2008 and 265 in 2007.

Link: Car loan takers top Malaysia bankruptcy list
Link: Car loan - The biggest killer in Malaysia personal finance planning

A total of 11.631 registered companies in Malaysia suffered a loss and bankruptcy in the first six months of this year, surpassing last years total of 11.409 companies.

Of the total of 10.879 de list of companies under section 308 of the Companies Act 1965 involving the guidelines are not in operation, 737 were voluntarily closed and 15 more involving foreign companies.

If this figure is taken into account, the expected total number of companies that closed this year will double compared to last year and could approach the record high of 27.913 were recorded in 2008.

Link: Many companies in Malaysia suffered and bankruptcy

When a person has declared bankruptcy, the court will appoint the Director General of Insolvency (DGI) to administer over the bankrupt's assets in order to settle the outstanding debts. The DGI will initiate an investigation to find any assets or properties that belong to the bankrupt and to sell or dispose them to repay the creditors.

For a Malaysian, being a bankrupt is tough for the individual. Among other things, the individual faces the following hurdles or restrictions:

1. He has to give up all his belongings and assets.
2. He is not allowed to open a bank account without the approval of the DGI.
3. He is not allowed to travel outside from the country without first getting approval from the DGI or the court. The DGI will hold his passport.
4. He is not allowed to do any business nor become a company director nor even be part of the company's management.
5. He has to sacrifice a certain percentage of his monthly income to the DGI to repay his debts.

Link: What does it mean to be a bankrupt

Malaysia will be bankrupt by 2019 if it does not cut subsidies and rein in borrowings, said Minister in the Prime Minister’s Department Datuk Seri Idris Jala on Thursday.

He said that Malaysia's debt would rise to 100 percent of GDP by 2019 from the current 54% if it did not cut subsidies.

“We do not want to be another Greece,” he said when officiating the Subsidy Lab Open Day here to receive feedback from the public on subsidies.

"If the government continues at the rate of 12 per cent per annum, Malaysia could go bankrupt in 2019 with total debts amounting to RM1,158 billion," he cautioned.

Link: Idris Jala: M’sia must cut subsidies, debt by 2019 or risk bankruptcy

Last, but not least.. : Protocols of Zion no. 20

2. When we come into our kingdom our autocratic government will avoid, from a principle of self-preservation, sensibly burdening the masses of the people with taxes, remembering that it (the government) plays the part of father and protector.

30. What also indeed is, in substance, a loan, especially a foreign loan? A loan is - an issue of government bills of exchange containing a percentage obligation commensurate to the sum of the loan capital. If the loan bears a charge of 5 per cent, then in twenty years the State vainly pays away in interest a sum equal to the loan borrowed, in forty years it is paying a double sum, in sixty treble, and all the while the debt remains an unpaid debt.

37. But it is a proof of the genius of our chosen mind that we have contrived to present the matter of loans to them in such a light that they have even seen in them an advantage to themselves.

Link: Protocols of Zion