Traders deliberately declare bankruptcy to get out of paying debt - PPIM

Once declared bankrupt, they no longer worry because they have money and are abroad.

13 Feb 2024 07:30pm
Photo for illustrative purposes only - 123RF
Photo for illustrative purposes only - 123RF

SHAH ALAM - A few traders are accused of deliberately making themselves bankrupt because they refused to pay their debts and chose the easy way out.

Malaysian Muslim Consumers Association (PPIM) secretary-general Datuk Ma'amor Osman said the strategy was usually used for those who took high insurance.

"They take high insurance. Let's say if they are traders, they burn their shops.

"That way they can be covered by insurance. Second, they go into high debt, then abscond (run away), that's what we usually hear.

"Usually those who are in high debt already have long non-performing loans (NPLs). Then they made a proposal to take on a bigger debt and when they were found, they ran abroad (before being declared bankrupt)," he told Sinar on Sunday.

Ma'amor said when they were declared bankrupt, they were no longer worried because they had money and were abroad.

"Foreign countries are happy to accept people who have money and don't care what their past stories are, for example Australia.

"If we go to Australia and bring a minimum of one million Australian dollars in cash, we invest, spend money and so on. Five years later we can get citizenship.

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"For people like them, the risks of being blacklisted are not taken into account at all," he said.

He further said being in debt to the point of declaring bankruptcy affected those who work in this country.

"If they are civil servants or work in the private sector, they can be fired. This is because the law in Malaysia states that employers cannot employ bankrupt people.

"Also there is another risk for those who are in debt as psychologically, they live in a stress condition. When other people know they are in debt, they feel weak and ashamed to meet people," he said.

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