First and foremost, the most important change made is to the debt threshold for bankruptcy proceedings. The threshold for initiating bankruptcy proceedings has been increased to RM50,000 under the Insolvency Act 1967 from the previous RM30,000 under the Bankruptcy Act. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Section 5(1) (a) of the Insolvency Act 1967 now reads: “(1) A creditor is not entitled to make a petition for bankruptcy against a debtor unless— (a ) the debt owed by the debtor to the requesting creditor, or if two or more creditors join in the application the total amount of debts owed to more than one requesting creditor, amounts to fifty thousand ringgit "This section provides that the minimum debt for the proceedings bankruptcy is RM50,000 and that bankruptcy proceedings can only be initiated against the debtor if the debt amounts to RM50,000. Referring to Parliament's Hansard regarding the Insolvency Act 1967 on page, Parliament's basic intention of increasing the threshold is to reduce the insolvency rate and provide protection. In my opinion, the position after the amendment is better as RM50,000 would be a more suitable figure for the current modern society. This is because the previous threshold of RM30,000 was set in 2003, which was 15 years ago. Therefore, it is safe to say that RM30,000 does not keep up with the pace of inflation. Furthermore, most importantly, with a higher threshold the failure rate will be reduced, which will benefit our country as a whole. Exemption of social guarantors from bankruptcy proceedings The next major amendment made concerns the exemption of social guarantors from bankruptcy proceedings. A social guarantor is defined by Section 2 of the Insolvency Act 1967 as those who do not profit from providing security for an education loan, a hire-purchase transaction of a vehicle for personal or non-business use and a real estate loan for personal housing. In the past, the Bankruptcy Act 1967 allows bankruptcy proceedings to be initiated against the social guarantor if all avenues have been exhausted by the creditor to recover the debt from the debtor, as provided for in section 5(3) of the Bankruptcy Act 1967, while the current section 5(3)(a) of the Insolvency Act 1967 provides for an absolute prohibition on the initiation of bankruptcy proceedings against social guarantors. Section 5(3)(a) of the Insolvency Act 1967 reads: " An applicant creditor shall not have the right to initiate any bankruptcy petition against a social guarantor." This means that social guarantors will no longer be subject to bankruptcy proceedings if borrowers fail to repay their debts. The purpose of this amendment is to provide protection and a fairer system to social guarantors who have always been victims and declared bankrupt due to non-repayment of debt. It should however be noted that other actions may be taken by creditors against social guarantors even if social guarantors cannot be declared bankrupt. Furthermore, it is important to note that the absolute ban only applies to social guarantors as the creditor can initiate bankruptcy proceedings against a guarantor other than the social guarantor if court permission has been granted. Please note: this is just an example. Get a customized document from our expert writers now. Get a custom essay In our opinion, the absolute prohibition of bankruptcy proceedings against the social guarantor is automatic discharge.