New laws will be enacted soon to “help honest debtors return to economic productivity”.
Cabinet has approved the Personal Insolvency, Financial Rehabilitation and Entrepreneurial Rescue Bill 2025 (Bill) to be tabled in Parliament.
This Bill will repeal the Bankruptcy Act 1944 (Act).
“The Bill aims to introduce a modern approach to personal insolvency, promoting the ‘fresh start’ principle to, as well as alternatives to formal bankruptcy,” said a Cabinet statement.
The new law will have a Debt Rehabilitation Order under which a simplified, fast-track procedure for low-value cases can be dealt with.
There will be a Debt Restructuring Arrangement through a voluntary alternative, allowing debtors and creditors to negotiate a plan for restructuring debts and partial repayment.
The new law will create a Debt Protection Moratorium which will be a temporary 60-day stay on creditor debt collection actions, allowing debtors time to seek advice and negotiate arrangements.
The Bill will now be tabled in Parliament.
