Costs and Process to bankrupt someone

Bankruptcy can be filed by either a debtor or creditor if a person cannot repay debts of at least $15,000. For creditors, they can file in Court to make a debtor bankrupt if they believe that the debtor can repay the debts owed to them.

Should you find yourself in the situation of a creditor, what can you do? And how much would it cost? This article aims to address the many questions a creditor may have to make an informed decision as to whether to apply to Court to bankrupt a debtor.

The Process of Bankruptcy

When a debtor is declared bankrupt, his or her assets shall be realised into proceeds to be placed in the bankruptcy estate for distribution by an Official Assignee, who is a public servant and an officer of the Court and works closely with the officers at the Insolvency Office. They are typically appointed by the High Court to be trustees of bankruptcy estates. However, should a petitioning creditor wish to request for a private trustee to administer the bankrupt’s affairs, the Court has the powers to do so.

The role of an Official Assignee is to act as a receiver of the bankrupt’s estate, whereby a bankruptcy estate shall be managed or overseen by an Official Assignee. The role of an Official Assignee also encompasses consulting with creditors, as far as practicable, as to how the bankrupt’s estate ought to be managed. Further, an Official Assignee’s role encompasses the following:-

• To investigate and manage the conduct and affairs of the bankrupt;
• To recover and realise the bankrupt’s assets for distribution to the bankrupt’s creditors; and
• To assist a bankrupt in relation to discharging from bankruptcy, should the Official Assignee be satisfied that the bankrupt’s conduct has been satisfactory and monthly contributions have been promptly paid.

After one is declared bankrupt, there will be a Bankruptcy Order given. The bankrupt will then be required to attend at the Official Assignee’s office within 21 days of the Bankruptcy Order given. The Official Assignee will then inform the bankrupt of his or her duties and responsibilities as a bankrupt, and a Statement of Accounts that records all assets and liabilities ought to be provided to the Official Assignee. The bankrupt also has the duty to disclose to the Official Assignee all of the property disposed of prior to bankruptcy. A monthly contribution plan shall be put in place after discussion with the Official Assignee.

If a bankrupt is able to pay off the target contribution that is decided by the Official Assignee, he or she may be discharged from bankruptcy.

A bankrupt also has to seek prior consent from the Official Assignee if he wishes to commence or continue a court action for damages or compensation for wrongful acts or personal injuries. However, for any action beyond that above-mentioned, a bankrupt is not permitted to commence or continue an action.

Further, one should note that a bankrupt’s name shall be listed in the bankruptcy register in Singapore, which makes the bankrupt’s name searchable by anyone in public, with a payment of the fee.