In Singapore, what does bankruptcy mean, and how is it defined?
Finding yourself unable to meet your financial responsibilities may prompt you to consider declaring bankruptcy as a solution. Perhaps it’s the finest solution for you. Prior to deciding to file for bankruptcy, you should be informed of all of your options and understand the bankruptcy procedure in detail. If you’re considering bankruptcy in Singapore, we’ll explain what it entails to help you decide whether or not it’s right for you.
Debtors in Singapore may file for bankruptcy voluntarily if they have debts of at least S$15,000 and are unable to pay them back. Creditors have the option of bringing bankruptcy procedures against the debtor in order to compel him or her to file for being Undischarged Bankrupt.
As soon as a debtor is declared bankrupt, all of their assets (save their HDB property) are sold and the earnings are put into bankruptcy trusts.
For the vast majority of bankrupts, the bankruptcy estate is administered by the Official Assignee (OA). Creditors may also appoint a PTIB (private trustee in bankruptcy), an accountant or lawyer, to monitor the bankrupt’s affairs if the debt is very substantial.
In what ways might declaring bankruptcy help you?
If you fulfill the following conditions, you may apply for bankruptcy in Singapore voluntarily:
- Your prospects of being able to pay off all of your debts are little to none.
- There is no way you can get a deal with your creditors on debt payments.
The interest on your obligations is also halted when you file for bankruptcy. In this arrangement, the Official Assignee’s monthly payments to you will be significantly reduced. Your creditors are not allowed to take legal action against you if you default. As a result of no longer having to worry about making monthly debt payments, you will feel a deep sense of relaxation and peace.
There are several reasons why someone could file for bankruptcy
Bankruptcy is no longer associated with being a morally bankrupt. Debtors who are desperate and have exhausted all of their other alternatives for repaying their debt may now consider declaring bankruptcy to be a sensible line of action.
For the following reasons, filing for bankruptcy is now considered a viable option:
Firstly, it stops future interest charges on the outstanding principal amount from accumulating and thereby avoids the accumulation of your obligations. Your debts will be paid off in full as a result of this.
It provides you with a more flexible and forgiving payment plan than you would otherwise have.. This suggests that your monthly payments will be lower than they were previously, when you were likely fighting to make ends meet month after month.It prevents you from being sued for the debts you’ve accrued.
How many people file for bankruptcy each year in Singapore?
Data from Japan’s Law Ministry’s Insolvency Office shows that more than 1,600 bankruptcy orders were granted each year between 2016 and 2018. Even if the number of bankruptcy petitions dropped by more than 40% in 2019, the overall number of petitions was still 965.
A debtor had 21 days to pay a statutory demand of at least $15,000 prior to the enactment of Covid-19. Temporary S$60,000 threshold increases in light of COVID-19 problem till September 2020 by Singapore government. As a result of the expiration of this act, the bankruptcy threshold has been increased from $10,000 to $15,000.