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How to get out of Bankruptcy in Singapore
There are 4 ways of doing so.
If you completely undertake any of these 4 methods,
- your name will be either completely and immediately removed from the bankruptcy register (and thus not searchable by the public), which an Annulment; or
- you will become an Undischarged Bankrupt, which means your name is still on the bankruptcy register and will be removed only after some time.
Just pay off all your debts
The first way seems the most obvious. However, you must take note that you must not only pay off all your debts but costs incurred in the bankruptcy as well.
Once that is done, the Court or the Official Assignee will issue a Certificate of Annulment. And your name is then removed from the bankruptcy register.
Apply to Court for an Order of Discharge
You make a formal application to Court for a discharge with a supporting affidavit and serve both documents on the Official Assignee or the private trustee managing your affairs.
The Court will consider the following non-exclusive list of factors in deciding whether or not to grant you a discharge:
- The amount of your debt;
- The cause of bankruptcy;
- How blameworthy were you for incurring the debt;
- Your domestic, financial and social circumstances;
- Your conduct;
- Your monthly financial contributions to the bankruptcy estate;
- Your cooperation (or otherwise) with the Official Assignee;
- Your interests (getting discharged) weighed against the creditors’ interests (repayment of debts); and
- Whether there have been any objections to your discharge.
If the Court grants the order for discharge, you will officially be a discharged bankrupt. Your name will still be in the bankruptcy register for another 5 years (and all your debts have been fully repaid), though.
If you still have not fully repaid your debts at the end of the 5 years, your name will be on the register permanently.
Feel free to contact us should you need to make an application for discharge. We are ready to advise you further.
Official Assignee issues you a Certificate of Discharge
This method is not within your control. It is the Official Assignee who may discharge you, provided:
- At least 3 years have passed since the commencement of bankruptcy;
- Where the proven debts do not exceed S$500,000;
- You have either fully paid your target contribution, or are proven unable to do so due to extenuating circumstances (like death, or severe illness which prevents you from earning a meaningful income); and
- The applicable validity period has passed from the date of submission of your Statement of Affairs.
The Official Assignee will consider a whole host of factors in deciding whether to discharge you, including:
- Whether you’ve met the Expected Dividend or Target Contribution;
- Whether you still have property which may be realized;
- How long you’ve been a bankrupt;
- The cause of bankruptcy;
- Your general conduct and cooperation in the administration of the bankruptcy;
- Whether you had committed any offence (for example, under the Bankruptcy Act; Insolvency, Restructuring and Dissolution Act; or Penal Code) leading up to or during the bankruptcy which adversely affected any creditor; and
- Whether there are valid objections from your creditors.
If the Official Assignee does issue you with a Certificate of Discharge, your name will still be in the register for another 5 years. This becomes permanent if you are unable to fully pay your target contribution within the 5 years.
At least 50% of your creditors who hold at least 85% of your total debt value accept your Repayment Proposal
Your proposal must be formally tabled at a general meeting and accepted by at least 50% of the creditors who hold at least 75% of the total value of your debt.
If the above is fulfilled, the Official Assignee will issue you with a Certificate of Discharge. As before, your name will be on the register for another 5 years. If you pay up before the 5 years, your name will be removed. If you don’t, your name will be there permanently.
In some cases, you may be able to get all the creditors to agree to your proposal. In such a case, the Official Assignee will issue a Certificate of Annulment instead.
Need Advice ?
Speak to a Lawyer Now
At Lions Chambers LLC, we pride ourselves on being responsive. We understand that some problems need immediate attention, let us assist you.
How can we help you
Bankruptcy can be very tough on you, your associates and your family. If you need advice on how to be discharged from bankruptcy, or how to go about undertaking one of the 4 methods outlined above, do contact us. We are more than willing to help. We will be able to guide you through the process and explain to you each and every stage the matter.
Lions Chambers LLC is an established law firm in Singapore. Our team of lawyers specialise in various areas of law and will be able to assist you. Our consultations are free. Please call +65 8777 3677 or click here to WhatsApp us today.