7 April 2017
MALAYSIA: Statutory Bankruptcy Discharge and Higher Initiation Threshold Introduced
Bankruptcy proceedings can now only be initiated against companies that owe RM50,000 (US$11,280) rather than the previous threshold of RM30,000 (US$6,768). The move comes as part of the country’s Bankruptcy (Amendment) Bill 2016, which also sets a statutory bankruptcy period of three years, after which discharge is automatic.
The Bill also provides a degree of protection for social guarantors, assuring that these not for-profit lenders are not automatically declared bankrupt when a borrower reneges on a loan arrangement. It also facilitates the introduction of a rescue mechanism allowing debtors to negotiate a debt settlement arrangement with their creditors prior to the initiation of any legal proceedings.