The number of Malaysians declaring personal bankruptcy surged 47 percent between 2001 and 2004 to figures more than double those seen during the Asian financial crisis of 1997, a report said yesterday.

Deputy Finance Minister Ng Yen Yen said bankruptcy cases rose to 16,251 cases in 2004 from 11,065 in 2001.

Even though the debt threshold for bankruptcy was increased from 10,000 ringgit to 30,000 in 2003, the Finance Ministry data still showed an rise in cases, Ng said.

"We are not even enduring bad times now. This is not good and it (the trend) must be stopped," she was quoted as saying by the Sunday Star newspaper.

Ng said even during the Asian financial crisis in 1997, there were only 7,396 bankruptcy cases.

Credit card debt

Statistics showed that 11 percent of the people became bankrupt because of non-payment of credit card debt while eight percent of the bankrupts were between the ages of 20 and 30, she said.

"This is serious because by right, no person under 35-years should be a bankrupt," the minister said.

Ng said the government was turning to education and improving awareness on how to contain overspending to prevent a further rise in financial failures.

Research showed a direct link between credit card use and the bankruptcy rate among those aged between 20 and 30, said T Indrani, deputy secretary general of the Federation of Malaysian Consumers Associations.

"One major problem is that young graduates have access to too much credit, which means they have a credit card even before they qualify to pay their income tax," she said.