Chapter 11, if some do not know, is the filing for bankruptcy by corporations in the United States (US) to protect them from litigation from lenders. There has been some talk in the US for this law to be further enhanced for individuals in debt.

That being said, a similar case needs to be made for Malaysia, particularly a review of the Bankruptcy Act 1967. But first, some background.

There is a growing number of people who are deemed bankrupt for being insolvent. As of February 2013, there were more than 243,000 Malaysians who were bankrupt, with both 2010 and 2011 averaging 20,000 additional bankrupts a year.

There has been talk of the need to revisit the Bankruptcy Act, making it easier for Malaysians to lift themselves out of this situation.

In July 2013, Langkawi MP Nawawi Ahmad asked in Parliament if we should allow bankrupts due to credit card debt, access to money they have in the Employees Provident Fund (EPF) to discharge them sooner.

The idea is a solid one, based on a rather rhetorical situation: do they have to wait until they are 55 to 65 to lift themselves out of bankruptcy?

The answer from Deputy Finance Minister Ahmad Maslan was odd at best. It seems that since we have a low number of those filing for bankruptcy from credit card debt and also this was “not in line with the EPF’s objectives and principles”, it was not possible.

Even better, Ahmad said that such a withdrawal would lower savings and affect the amount of funds available for their livelihood once they reach the age of 55.

Of course, the deputy minister does not even consider the fact that the stress of bankruptcy and the challenges these people face could lower life spans and they may not even reach that age.

Bankruptcy laws reviewed, but how?

Currently, more youths are going bankrupt. In a piece by a local English daily, 2013 saw 22,000 young Malaysians filing for bankruptcy, with more than RM30,000 in debt. A review of the bankruptcy laws are on the table, but there has yet to be any word of how the amendments would assist.

In fact, the issue has been stalled since 2013, with no such tabling of amendments even mentioned in the media since. For some reason, our legislative branch of government, with due respect, is slower than a 486 CPU in an era of Quadcores. It is akin to a 56K modem in the era of broadband, or a tortoise racing against a cheetah.

I think many get the picture.

Yet, the deputy minister clearly states the figures that are important to bring up. For household debt, 47 percent comes from housing, 20 percent from cars, 8.7 percent from personal loans, and 5 percent from credit cards.

Plainly, the cost of living in Malaysia is unbearable to its people to the point of going into serious debt to cope, and the young start becoming debtors earlier.

Education is getting expensive, public transport is still in a major overhaul and even salaries are not going up as quickly as they should.

On Jan 8, 2015, it was made clear that the current Malaysian middle class surveyed by AIA in a report titled ‘Hopes and Aspirations of the Middle Class in Asia’ wanted RM1.9 million available as their retirement funds.

Contrary to the suggestions of Credit Management and Counselling Agency (AKPK) chief Koid Swee Lian for Malaysians to take a second job to get out of debt, why not allow them to withdraw from EPF to be used as capital for investment as they see fit?

Access to credit and capital to open business

We constantly see leaders in business saying that small and medium enterprises (SMEs) are the engine that drives the national economy, and it is time to eat those words. More and more Malaysians want to strive into business, but the issue will always be the access to credit and capital.

Malaysia needs a policy to allow second chances for people to lift themselves out of debt, bankruptcy and even poverty. Laws and policies can assist these by making it easier using resources available but illiquid – in this case, their EPF funds.

Prime Minister Najib Abdul Razak when first ascending the premiership said that the era of good government knowing best was over. Sadly, it seems that government agencies and ministers did not get the memo.

In the case of granting capital, the government has established far too many agencies such as Tekun Nasional and Teraju, as well as others, to assist in getting capital into the hands of the people.

Why? While it is fair to assume the government does this to assist the issue of giving credit to the masses, why not just allow the withdrawal from the EPF instead of just for housing, but to reduce debt and to lift one out of bankruptcy?

Malaysians know how to spend their money better than the government, and it should reflect in our national policies.

Until we look out for everyone, by not allowing them access to more cashflow through policies that allow them to invest in what they believe in, we are exacerbating the problem.