PETALING JAYA: Close to 25,000 Malaysians from Gen Y,
defined as those below age 35, have become bankrupts over the past five years.
Their inability to settle loans for cars, houses and
personal loans or for being guarantors for other loan defaulters are the main
reasons for the worrying trend.
A total of 24,953 people below the age of 35 had been made
bankrupts since 2010, according to the Insolvency Department’s records.
Between January and April this year, there were 107,306
cases of bankruptcies, 948 of which involved people under the age of 35.
The Bankruptcy Act states that a person could be subjected to
bankruptcy proceedings if he or she fails to settle a minimum debt of RM30,000.
The Federation of Malaysian Consumers Associations (Fomca)
has sounded the warning bell for a financial education policy to tackle the
growing problem of young bankrupts.
“It is a serious problem as those affected are young workers
who are the nation’s future,” said its secretary-general Datuk Paul Selvaraj.
“Fomca is drafting a financial education policy with the
hope that the Government will implement it at all levels.”
Selvaraj said based on its survey of 1,000 respondents in
2013, 37% of young Malaysians were found to be living beyond their means while
47% used more than one-third of their monthly incomes to settle debts.
He said the rising cost of living, moderate salary
increments and low retirement savings would only worsen the situation if the
issue was not addressed soon.
“We have initiated several awareness programmes and even
published a monthly magazine called Ringgit funded by Bank Negara for the
purpose,” he said.
Selvaraj said Fomca was gathering feedback from stakeholders
and had started another survey to gauge the extent of the problem, adding that
the findings and recommendations would be submitted to the Government by the
end of the year.
Among those involved in the survey are the Credit
Counselling and Debt Management Agency, known by its Bahasa Malaysia acronym of
AKPK (Agensi Kaunseling dan Pengurusan Kredit), non-governmental bodies,
financial institutions and insurance companies.
AKPK was set up by Bank Negara in 2006 to provide
counselling, debt management and financial education to help individuals take
control of their financial situation.
An agency official said that if a person seeking help was found
to be unable to manage debts, he or she would be advised to undergo a debt
management programme.
“After a confidential counselling session, personalised debt
repayment plans will be worked out for individuals through negotiations with
the financial service provider.
“The programme is also extended to those who are not
bankrupt or under advanced litigation process, have a positive net income and
whose loans are worth less than RM2mil and taken from institutions regulated by
Bank Negara,” he said.
All services by AKPK are free and available at its 11
branches and 23 credit counselling offices in major banks nationwide. For more
information, log on to www.akpk.org.my.
Source: The Star
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