By D KANYAKUMARI / Pic By AFIF ABD HALIM
The Credit Counselling and Debt Management Agency (AKPK) has expanded its services to become a Voluntary Agreement (VA) Nominee in its efforts to aid those who have been declared bankrupt, in line with its aim to reduce the national bankruptcy rate by 50% before the end of 2018.
A briefing by AKPK earlier explained that the VA mechanism is one of eight amendments made to the revised Insolvency Act 1967 (previously known as the Bankruptcy Act).
Its CEO Azaddin Ngah Tasir (picture) said currently there are about 20,000 people who are declaring bankruptcy annually.
“We want to cut these numbers in half to at least 10,000 by the end of this year,” he said.
The VA involves an application to the court for an interim order, whereby during its effective period, no bankruptcy petition or other legal process can be taken against the debtor without first getting permission from the court.
“We would first look into the debtors’ affairs to see what is the best way for them to make the payments. Once we’ve got the approvals from the court, we would then talk to the creditors and restructure the loans accordingly for them,” he said, adding that a 5% nominee fee of the total outstanding amount owed will be subjected.
AKPK noted that the debtor is allowed to travel overseas, be a director of a company, run a business, as well as retain a job with the VA mechanism.
“It provides a legally binding agreement between the creditors and debtors that protects the debtors from any legal action should they comply with the agreed installment plan,” said the statement.
According to AKPK, thus far, 15,439 cases with debts amounting to RM617.4 million have been handled.
AKPK received 683,169 cases of people requiring counselling to manage their finances last year. In addition, 210,814 cases out of that number signed up for the debt management programme.
In September 2017, the Insolvency Department said there are a total of 294,000 Malaysians between the ages of 35 and 45 who have been declared bankrupt.