What is Bankruptcy in Singapore?
Bankruptcy in Singapore should be seen as a last resort to resolve problem debts.
Bankruptcy is a legal process initiated when an individual cannot repay a debt amounting to $15,000 or more. It can be initiated by either the person in debt or the creditor by filing a bankruptcy application with the High Court.
Being declared bankrupt carries various consequences, including restrictions on overseas travel, limitations on managing a business or serving as a company director, and challenges in obtaining loans or securing employment.
You are advised not to ignore communications from your creditors, such as calls, letters, or court documents requesting payment. Even if you choose not to respond, you can still be declared bankrupt. However, bankruptcy should only be considered as a last resort after all other options to repay your debts have been exhausted.
To file a bankruptcy application for yourself, the following is a very general guide:
1. Find a licensed Insolvency Practitioner (IP) to serve as the Private Trustee in Bankruptcy (PTIB). A listing of registered PTIBs can be found on Ministry of Law website here.
2. Obtain the IP’s consent and a copy of their licensing documentation.
3. Make a deposit of $1,850 with the Official Assignee (OA) and prepare the necessary documents using the respective forms specified in the Insolvency, Restructuring and Dissolution Act 2018 (IRDA)
4. File the documents via eLitigation. You can do so at the CrimsonLogic Service Bureau (CLSB) located at the Supreme Court and State Courts premises.
When a person is declared bankrupt through a High Court order, a Private Trustee in Bankruptcy (PTIB) is typically appointed to manage the individual's financial affairs.
In cases where there is public interest involved, the Official Assignee (OA) may serve as the trustee in bankruptcy (see Ministry of Law Press Release dated 27 October 2023).
The PTIB will discuss with the bankrupted individual to determine the Monthly Contribution (MC) and Target Contribution (TC) to be repaid to creditors. The amount is based on the bankrupt’s income and expenses required for themselves and their family.
There is no automatic discharge from bankruptcy in Singapore. Typically, first-time bankrupts may be discharged in three to seven years. The Official Assignee (OA) may discharge the bankrupt from bankruptcy, after taking into consideration certain factors, such as whether the bankrupt has met the Target Contribution (TC).