Expanding second chance: A step in the right direction, but will it prevent future struggles?

PUTRAJAYA - The government's initiative to expand the Second Chance Policy to individuals under the age of 40 with debts not exceeding RM200,000 is a correct and beneficial step, but it needs to be implemented carefully to prevent individuals from repeating their mistakes.

For private sector employee Fadzli Norhisham Md Rashid, 37, the initiative will provide benefits and advantages to bankrupt youth in gaining broader job opportunities and reusing banking services.

"At the same time, this opportunity serves as motivation for the younger generation to review and change their way of thinking and lifestyle, especially regarding finances," he said.

Norman Mai, 29, who is a corporate communications and marketing executive at a private university in the federal capital, suggests that the policy be accompanied by a more holistic financial literacy programme.

He said it is important for the government to develop approaches or guidelines in educating the youth about effective financial management to prevent them from making the same mistakes of falling into debt in the future.

"This proactive strategy has the potential to reduce dependence on periodic debt relief measures while fostering long-term financial stability.

"Providing opportunities alone may not be sufficient to address the immediate financial problems faced by an individual," he said.

He said debt relief alone is not adequate, and there needs to be thorough research in terms of implementation including monitoring financial management by relevant parties that may be overlooked because there is an urgent need, especially for those who have experienced financial crises.

Echoing Norman's sentiment, freelance writer Garret Dawum, 35, said the second chance initiative needs to be fine-tuned and reviewed again following several factors such as the increasing cost of living and tax hikes.

"The cost of goods is rising but the salaries received cannot keep pace with the demands of life. Young people may struggle to survive and will be under more pressure.

"I believe the government needs to provide details in expanding this second chance measure so that it can benefit the youth and not be implemented in vain," he said.

In March last year, the Cabinet agreed to proposed amendments to the Insolvency Act 1967 (Act 360) involving improvements to the bankrupt discharge provisions in Section 33C which took effect from Oct 6, as announced by Minister in the Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said.

Billed as the Second Chance Policy, the amendment is to assist automatic discharge from bankruptcy within a period of three to five years from the date the bankrupt individual submits his or her statement of affairs.

When tabling Budget 2024 in October last year, Prime Minister Datuk Seri Anwar Ibrahim announced that the Second Chance Policy on bankruptcy would be expanded to those aged 40 and below who have debts not exceeding RM200,000 beginning this year. - BERNAMA