Positive amendments to Insolvency Act promote mental well-being of bankrupts

KUALA LUMPUR - The enforcement of two amendments of the Insolvency Act 2023 which came into force yesterday, was seen by experts as a positive step towards safeguarding the mental well-being of people in the country.

Clinical pyschologist Prof Dr Zubaidah Jamil Osman of the Management and Science University (MSU) said the move was a good measure from a humanitarian point of view as it allowed people suffering from mental illnesses due to debts a second chance to lead a normal life.

The amendment added two new categories of individuals who can be discharged through the issuance of a certificate from the director-general of the Insolvency without going through debtors' objections under Section 33B (2A).

"In the case of people who have lost their full functioning, they can no longer make their own decisions, their cognitive abilities are significantly impaired. So, if the examination is conducted by people who specialised in mental health, I think that is a good step.

"There should be a comprehensive assessment to determine the extent to which the illness has impaired the debtor's functioning in terms of self-care and behaviour, cognitive level or decision-making ability, emotional and social functioning.

"This will determine whether the mental illness should be classified as moderate or severe," she told Bernama.

However, Dr Zubaidah hoped that no one would exploit their mental condition just to benefit from the amendment of the law.

On Thursday, Minister in Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said said the enforcement of Act A1695 demonstrated the government's interest in giving bankrupt individuals a second chance to live a better life and contribute to the country's economic development.

The inclusion of the two categories, namely individuals who cannot manage their personal affairs due to mental illness as defined in the Mental Health Act 2001 (Act 615) and those aged 70 and above, who, according to the Insolvency director-general's discretion, were incapable of contributing to the bankruptcy administration.

Act 615 defines mental disorder as 'any mental illness, arrested or incomplete development of the mind, psychiatric disorder or any other disorder or disability of the mind however acquired.

Consumer finance expert Prof Dr Mohamad Fazli Sabri said the amendment was justified considering that recent statistics show that more and more people in the country are suffering from mental health problems due to financial pressures from the COVID -19 pandemic.

"So if this person has a mental problem and we know that they are not able to manage themselves, manage their finances and find a job, how are they going to manage (to pay the debt)?

"This shows that the government is being cautious. If someone says he has a mental health problem, he must have received confirmation from a medical expert, not from themselves," he said.

Mohamad Fazli also welcomed the decision to release bankrupt persons aged 70 and above, as this age was not a productive age for work.

"Currently, the life expectancy of Malaysians is 75 years for men and 79 years for women. In this sense, it is not a productive age to continue working.

"Those who are 70 years olds generally do not work except those who come from well-to-do families. So I think these changes are very appropriate in the current situation," he said.- BERNAMA