Bankruptcy limit raised to RM150,000 to ease debtors' burden

The government plans to lift the bankruptcy filing limit from RM100,000 to RM150,000, a move intended to reduce the likelihood of insolvency and give borrowers additional time to reorganise their finances. In parliament, Minister in the Prime Minister's Department (Law and Institutional Reform) Azalina Othman Said said more than 253,457 individuals have been discharged under the Second Chance Policy between 2023 and September, and that a fast-track discharge scheme prioritises groups such as single parents, micro, small and medium enterprise traders, fraud victims and buyers of abandoned housing projects.

Applications can be lodged online through the e-Insolvensi portal, with qualifying cases processed within 36 days, pending creditor consent. The Insolvency Department aims to cut the processing time further by 2027. Prime Minister Datuk Seri Anwar Ibrahim, while presenting the 2027 Budget, confirmed the threshold increase and announced an expansion of the Second Chance Policy to include primary caregivers of disabled or elderly family members, gig workers and people with irregular earnings.