The Malaysian Bankruptcy Act 1967 was amended in the year 2003 and came into force on 1 October 2003.
Changes brought about by the new amendment include:
* A change in the title of the Official Assignee Malaysia to the Director-General of Insolvency Malaysia (DGI);
* Inclusion of a definition of 'social guarantor';
* A requirement for a petitioning creditor to prove to the Court that he or she had exhausted all avenues to recover
debts owed to him or her by the debtor before he or she can commence any bankruptcy action against a 'social
* An increase in the minimum debt which enables a person to be declared bankrupt from RM10,000 to RM30,000;
* Enabling the DGI to give the creditor/s a notice of his or her intention to issue a certificate of discharge to a
bankrupt without having to give any reason;
* Stopping the calculation of the rate of interest on the date of the receiving order granted by the court in cases
where the interest is not reserved or agreed upon;
* Conferring powers of a Commissioner of Police to the DGI and the powers of a police officer on the investigation
officers to facilitate investigation, prosecution and enforcement;
* An increase from RM100 to RM1000 as the minimum amount that cannot be borrowed by an undischarged bankrupt without
informing the person who gives the credit or loan that he or she is an undischarged bankrupt.
The DGI and the Ministry of Domestic Trade and Consumer Affairs are in the process of setting up a committee to work together on reviewing Part 10 of the Companies Act 1965.
* Bankruptcy Act 1967
* Parts 7,8, 10 of the Companies Act 1967
Personal Insolvency Procedures
The personal insolvency procedures that apply in Malaysia are contained in the Bankruptcy Act 1967. A debtor can become bankrupt through either a debtor's petition or a creditor's petition. There is a summary administration available for small bankruptcies. A debtor can also avail himself/herself of a composition or a scheme as an alternative to bankruptcy. The Official Assignee administers all personal insolvency administrations.
Corporate Insolvency Procedures
The following insolvency procedures are available under the Companies Act 1965:
* Pt 7 Arrangements and Reconstructions
* Pt 8 Receivers and Managers
* Pt 10 Winding Up.
Winding-up can be a court procedure or a voluntary procedures (under the control of members for a solvent company or under the control of creditors for an insolvent company).
Private practitioners can be appointed by, in windings-up, for instance, the Official Receiver can act as a liquidator and is a default liquidator if no other liquidator is acting.
Part 10 of the Act will be reviewed in the near future.
Role played by Government
The Official Assignee (a government official) is responsible for administering all personal insolvency procedures.
The Official Receiver (a government official) can act as a liquidator of companies being wound-up and is appointed by default if no other liquidator is acting. The Official Receiver also supervises the activities of private sector liquidators appointed by the court.
Role played by private sector practitioners
Private sector practitioners are not appointed to personal insolvencies.
Private sector practitioners may take on corporate insolvency appointments although the Official Receiver may also act as a liquidator.
Role played by the Court
The general powers of the Court in Bankruptcy are included in s91 of the Bankruptcy Act 1967.