The Determinant Factor of Probability of Individual Bankruptcy: The Case for the Army in Aviation Medical Institute, Subang

Abstract

The number of bankruptcy cases is rising significantly in Malaysia. According to the Malaysia Department of Insolvency, 2,591 individuals were declared bankrupt in May 2021. The movement towards personal bankruptcy is now one of the government's main concerns. Therefore, this study aims to determine the factors towards the probability of individual bankruptcy; financial planning, rate of income, and attitude towards debts among the army in the Aviation Medical Institute, Subang. The study adopted a cross-sectional design, and 110 questionnaires were distributed to the army in the Aviation Medical Institute, Subang. A simple random sampling technique was employed, and the data gathered were analyzed using mean, multiple regression, and Pearson correlation analysis. The findings indicate a positive relationship between financial planning (r = 0.799, p < 0.000), rate of income (r = 0.780, p < 0.000), and attitude towards debts (r = 0.715, p < 0.000). The multiple regression results have shown that the research model explains that 70 percent of the dependent variable variance and all independent variables except attitude towards debts significantly impact individual bankruptcy probability. The most contributing factor of the probability of individual bankruptcy among the army in the Aviation Medical Institute, Subang were financial planning factors with the value of 0.503 and a significant value of 0.000. To increase awareness of army personnel's financial planning, they must develop a better understanding of financial literacy, develop good attitudes towards spending, and seek financial advisors to guide financing planning. This study's findings are also beneficial for higher education, government, financial and legal institutions, society in general, and the army, especially in the context of consciousness and the cost of financial distress. The information enables everyone to avoid bankruptcy and take necessary precautions or rectification to reduce the number of bankruptcies. Therefore, this study sought to be a centerpiece to help the government authorities develop better support to guide the army to manage their financial planning sustainably.