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Thursday, March 30, 2017

Parliament passes Bankruptcy (Amendment) Bill 2016

The Bankruptcy (Amendment) Bill 2016, which among others, protects social guarantors from being declared bankrupt, was passed by Parliament today.
Minister in the Prime Minister's Department Azalina Othman Said described the bill as a reform to provide for a fairer system for social guarantors.
"This is because when we look at the definition of social guarantors, they are not guarantors who are profit oriented, but they stood as guarantors for study loans, research grants," she said when winding up the debate on the bill.
However, she said the social guarantors would still face other process of the law should they were to abuse the provision.
"The person may not be declared a bankrupt, but there are still other actions that can be taken," she added.
Earlier, when tabling the bill, Azalina said the government considered eight policy changes when in amending the Bankruptcy Act 1967, which included preventing bankruptcy action on social guarantors and raising the minimum threshold for bankruptcy.
However, she said, the new law did not cover social guarantors who had been declared bankrupt.

She said the bill would provide protection to social guarantors through amendment of Section 33B on four categories of bankruptcy which could be waived on the discretion of the director-general of Insolvency without objection by the creditor.
"In a situation where the social guarantors have not been declared bankrupt, with effect of this bill, they cannot be declared bankrupt," she added.
However, the director-general of Insolvency is still bound by the court in the issuance of the bankrupt discharging certificate, she added.
The Parliament sitting continues tomorrow.
- Bernama

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