Bankruptcy Trend in Malaysia

According to a recent newspaper report, there were 38357 bankrupts in the last five and a half years between the age of 25 and 44. The trend is that people who declared bankruptcy are getting younger. Here is the breakdown of those who declared bankruptcy from 2005 until May 2010:

Take-home messages


• A business venture can be successful or end in failure. The most important thing is not to put all the eggs in one basket. An emergency fund lasting three to six months to cover your normal expenses is a must.

• You can obtain a loan but it has to be included in your monthly cash outflow. If it is not within your budget. Don’t go for a loan to buy a car or a house. Save for a bigger down payment.

• You are not obligated to stand as a guarantor. You cannot control how another person manages his or her finance so you cannot be sure that the person who gets the loan will honor the loan repayments fully. Do you like to pay for something you don’t own every month? This will happen when the borrower defaulted and he or she is nowhere to be found.

• Credit card is not for getting credit (The bank will be very happy if you do): The right way to use a credit card is to back up a dollar your charge to your card with a dollar in your bank account. At the end of the month, you pay the amount due promptly and fully. The fact is that getting credit and incurring debt is easy but getting out of debt is very difficult.

• There are two things in life you cannot escape; that is death and tax. It is necessary to set aside an amount every month to cover tax payable.