THE Insolvency (Amendment) Act 2023 will come into force tomorrow, Law and Institutional Reform Minister in the Prime Minister’s Department Azalina Othman said.

She said the enforcement demonstrated the government’s concern to give bankrupt people a chance to lead better lives.

“The enforcement of the act reflects the government’s commitment to ensure no one is left out in the national development,” she said in a statement today.

On March 10, the cabinet agreed to amend the Insolvency Act 1967 following talks with the Attorney-General’s Chambers, Office of the Chief Registrar of the Federal Court, the Finance Ministry, Bank Negara Malaysia, the Inland Revenue Board, the Employees Provident Fund, the Credit Counselling and Debt Management Agency and the Association of Banks in Malaysia.

The amendment involving section 33C of the law was aimed at assisting bankrupt people to be automatically discharged between three and five years from the date on which the debtors submitted their declarations of assets.

Azalina said in line with objectives of the second-chance policy, the amendments to section 33C and subsection 33B(2A) of the act would be enforced retrospectively in bankruptcy cases administered before the enactment.

“The second-chance policy aims to discharge up to 130,000 bankrupt individuals within a year of the (amended act) coming into effect. The number represents half of the cases being administered by the Insolvency Department,” she said.

She said the amendment included two new categories of people who could be discharged via certification from the insolvency director-general without undergoing debtors’ objections, under section 33B(2A).

The two categories are people who cannot manage their personal affairs due to mental illness as defined in the Mental Health Act 2001, and those aged 70 and above, who, according to the insolvency director-general’s discretion, are incapable of contributing to the bankruptcy administration.

Through amendments to the insolvency law, the bankruptcy administration would be improved with the use of remote communication technology for meetings with creditors and incorporating the ability to send notices via electronic communication, Azalina said.

She said the mandatory first meeting of creditors was abolished as an initiative to expedite the administration process. – Bernama, October 5, 2023.