From January to May this year, 2,694 people went bankrupt in Malaysia, bringing the cumulative total to 274,628, according to the Malaysian Bankruptcy Bureau's official website, the Star reported.
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Sixty percent of those who went bankrupt from 2018 to May were 25 to 44 years old.
In addition, from 2018 to May this year, more than 200 people under the age of 25 went bankrupt.
Between 2018 and May this year, nearly half of the 46,132 bankruptcies were caused by personal loans, along with car loans, business loans and defaulting on credit card debt.
“There have been 17 bankruptcy filings this year through May.”
“The average number of bankruptcy applicants per day in 2022 is 18.”
However, as of last year, the country saw an average of 6,500 bankruptcy cases a year, down from an average of 16,000 cases in 2018.
The significant decrease was due to a change in the state's bankruptcy regulations on 20 September 2020, which raised the bankruptcy threshold from RM50,000 to RM100,000.
Of those who declared bankruptcy in 2018, 58% were in arrears between RM100,000 and RM499,999, 8% were in arrears between RM500,000 and RM999,999, and 5% were in arrears over RM1 million as of May this year.
The state with the highest number of bankrupt
Selangor topped the list with 22,608 cases as of May this year, followed by the Federal Territories (46,876 cases) and Johor (32,441 cases).
Commenting on the figures, Prof Dr Mohamad Fazli Sabri, an expert on consumer finance, said an average of 18 people go bankrupt every day, which is likely to be much lower than in previous years.
“If we multiply 18 times 365 days, we will have close to 6,600 bankruptcy cases a year, although this is lower than in previous years, we also need to bear in mind that the bankruptcy threshold has been raised to RM100,000 from RM30,000 and RM50,000 in the past.”
“So, we can't compare apples to apples this year, but with an average of 18 bankruptcies a day, it's something we should be concerned about.”
He also advised members of the public in financial trouble to seek expert help rather than take out new loans and repayments directly.
“The fact that a lot of people are going bankrupt because of personal loans is a cause for concern. We don't know why they are taking out loans. They may have spent money on something they didn't need.”
“But it is also possible that these people are taking out loans to pay their debts and should seek expert advice, such as credit Counseling and Debt Management Agency (AKPK).”
Kong Ling Long, director of the small and medium enterprises group at the Malaysian Chinese Chamber of Commerce, said he believed many people would go bankrupt because of a lack of financial management.
“An average of 18 bankruptcies a day is very impressive, and it is conceivable that tomorrow there will be another batch of bankruptcies and the cycle will start again.”
“So, I think it would be important to emphasize personal financial planning.
