It is plain wrong to withdraw the Employees Provident Fund (EPF) to clear bankruptcy cases, even if there are clear genuine reasons for doing so as prescribed in the Jan 29 letter by Hafidz Baharom, titled 'Allow EPF withdrawal as a way out of bankruptcy'.

Presently, there are already too many withdrawal options to take out EPF money and it is irresponsible for the EPF to further allow withdrawals to clear a person's bankruptcy case.

What happens when the time comes in your old-age, penniless or with meagre savings despite being out of bankruptcy?

Bankruptcy offers protection to individuals from further pursuit from creditors and buys time to sort out one's finances.

A person can then apply for a discharge of bankruptcy after five years, once the individual can prove to the director-general of insolvency that the assets have been properly administered.

It is a fact that some are bankrupt due to lavish lifestyles or simply keeping up with the Joneses, where there is a must to show off to obtain more pride. Pride is something a person can swallow, but it can also swallow the person up when it is excessive.

There are things that are needed and things that are simply wanted. An example is buying a cheap, reliable, less prestigious car for one's needs, or having a branded expensive car which costs a bomb and is expensive to upkeep.

Both cars serve the needs of getting from point A to B, but it takes pride to be materialistic and live beyond one's means. In a worst-case scenario, just plan earlier and take the public transport.

Youngsters nowadays are constantly bombarded with advertisements of idealistic living where some stumble to want instant gratification, and to do so would mean incurring debt - namely, credit card debt and unsecured personal loans.

The easy credit given, low down payment and long instalment period gives a false sense of affordability, as the time will come when debt becomes a burden.

Vicious cycle

All it takes is an unexpected simple emergency such as a car breakdown, illness, or some necessity items required.

The vicious circle of obtaining new debt to pay off overdue debt would literally make a person drown in liabilities when a breaking point is reached.

Looking to the EPF for a bailout would merely postpone and compound the problem to another time, if one continues with a lavish lifestyle and thinking that all is going well and fine.

Some people need to stay bankrupt as a learning lesson to be more financially prudent instead of just thinking of today's need and wants without throwing caution to the wind.

The inconvenience caused by bankruptcy can be a lesson well-learnt to be more prudent and realise that there are other self-actualisation aspects in life that are more fulfilling than being a materialist.

Then there are those who venture into businesses without any back-up plan or an exit strategy, thinking that entrepreneurship is the fast-track to strike the jackpot only to find out later that it is a dog-eat-dog world, where only the survival of the fittest make it in business.

The EPF must cut down the number of options for withdrawal and limit them to really beneficial and necessary matters - such as down payment for purchasing a first house and serious medical issues only.

Having more withdrawals options would lead to abuse as seen in the EPF computer purchase withdrawal scheme, which was eventually terminated.

It was reported in The Star that 69 percent of people eligible to withdraw within a year have less than RM50,000 for retirement.

Having another withdrawal option to clear bankruptcy would exacerbate the problem further. This is where EPF must take a stand not to waver into giving the withdrawal option to clear bankruptcy.