A comparative legal study on discharge of bankruptcy in Malaysia, United Kingdom, Australia, and Canada / Rehah Ismail

The Malaysian economy is facing another challenging year in 2020 due to COVID-19 pandemic. COVID-19 has exposed financial institutions to an increase in non-performing loan or credit default risk due to a high number of business closures and increase in unemployment. The closure of businesses would lead to cash flow problems which in turn will affect individual’s capability to fulfill their financial instalments. Bankruptcy cases are expected to increase tremendously. The effort by Malaysian government in increasing the threshold amount to RM100,000 by virtue of the Insolvency (Amendment Act) 2020 in order to reduce the volume of bankruptcy cases is applauded. However, the other provisions in the Insolvency Act 1967 including automatic discharge of bankruptcy remain unchanged despite the current pandemic situation. This research intends to examine the effectiveness of automatic discharge provision under the Insolvency Act 1967 governing personal insolvency in Malaysia. This research employs a qualitative method in identifying and analysing the existing law and any legal issues and problems derive from the discharge provision in Malaysia and other countries such as United Kingdom, Australia, and Canada to determine the effectiveness of the law and whether it requires legal reform as well. This research will propose recommendation to overcome any legal issues and problems of its implementation.