Malaysia targets bankruptcy discharges in under 36 days next year

Minister in the Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Othman speaks during the debate winding-up session at the Parliament building in Kuala Lumpur on October 26, 2026. — Bernama pic

First Published: Monday, 26 Oct 2026 4:01 PM MYT

KUALA LUMPUR, Oct 26 — The government aims to further shorten the processing time for bankruptcy discharges to less than 36 days next year to accelerate the financial recovery of individuals eligible for a second chance.

Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said said the initiative under the Fast Track Discharge Programme would be implemented through the Malaysian Insolvency Department (MdI).

She said the move was a continuation of the existing fast-track discharge programme, which enables eligible applications to be processed within 36 days, subject to conditions being met and no objections being raised.

Azalina said the government had also strengthened its recovery efforts through the Second Chance Policy, which recorded 253,457 bankruptcy discharges from 2023 to September 2026.

“These efforts will continue through the 2026 Fast Track Discharge Programme, which prioritises certain groups, including single mothers or fathers, micro, small and medium enterprise (MSME) borrowers, fraud victims and purchasers of homes in abandoned housing projects.

“These measures will be supported by improvements to work processes, the expansion of digital services and stronger financial recovery mechanisms to help more eligible individuals obtain a second chance,” she said when winding up the debate on the Supply Bill 2027 (Budget 2027) at the policy stage for her ministry in the Dewan Rakyat today.

Azalina said the digitalisation of MdI services also enabled bankruptcy discharge applications to be submitted online through the e-Insolvensi portal.

Meanwhile, responding to a question from Datuk Mohd Isam Mohd Isa (BN-Tampin) on whether it was appropriate for a Member of Parliament to ask the Prime Minister to direct the Attorney-General to take action against certain individuals, Azalina said the proposed separation of the roles of Public Prosecutor and Attorney-General was among the measures to prevent perceptions of interference in prosecution proceedings.

She said the appointment mechanism for the Public Prosecutor, which had been debated in Parliament, would make the process more transparent while strengthening checks and balances on executive power.

“What we do not want is the perception that there is a ‘hidden hand’ behind any particular action,” she said. — Bernama