There is a new provision in Insolvency Act, 2016 a formal insolvency process that is available to individuals and is used as alternative to bankruptcy. The scheme known as Individual Voluntary Arrangement is an agreement between a debtor with their creditors offering to settle their debts with specific terms and period. This proposal start off with the appointment insolvency practitioner as “Nominee” who will prepare the scheme to get court sanction. If the scheme is approved the debtors will not be declared bankrupt but be given time to pay off the debts with the supervision of the “Nominee”.

The insolvency practitioners must be licensed by Malaysian Department of Insolvency before they can take up the appointment as ‘Nominee’.