KUCHING: Greater efforts must be made to lessen the load of guarantors including changing and review existing laws.
Assistant Minister of Youth Development Datuk Abdul Karim Rahman Hamzah said this is because guarantors made up a large number of those declared bankrupt.
He said being bankrupt at an early age could be a traumatic experience, especially if it is due to being a guarantor.
“It’s just like a ‘death penalty’ imposed on an innocent party. The public, whether they are young or old, should be made aware of the implications and dangers of being a guarantor to any facility given by a financial institution be it a personal loan or a loan for a car or a house.
“In the event of the principal borrower defaulting, the guarantors are jointly and severally liable in law to pay,” he told The Borneo Post when contacted yesterday.
He was commenting on a recent revelation by Minister in the Prime Minister’s Department Nancy Shukri that 13,540 people were declared bankrupt due to their failure to repay hire purchase and business loans from January to September this year in Sarawak.
She said as a whole, many youths in the state aged between 35 and 44 were declared bankrupt due to credit card debts, vehicle hire purchase and housing loans.
