Discharge from Bankruptcy
How do I get out of Bankruptcy?
There is no automatic discharge from bankruptcy in Singapore. However, you can get out of bankruptcy in these three ways:
a. Annulment of the Bankruptcy Order by full settlement or Offer of Composition or a Scheme of Arrangement;
b. Discharge by the High Court; or
c. Discharge by Certificate of the Official Assignee.
What is an annulment?
When a bankrupt repays his debt in full or makes a settlement offer which is accepted by a majority (in number) of his creditors who also comprise at least 75% of the total debt owed, the Bankruptcy Order made against him will be annulled.
In the case of a settlement offer, the outcome of the annulment is dependent on the creditors. If the creditors accept the proposal, a Certificate of Annulment will be issued under Section 95A of the Bankruptcy Act (Chapter 20).
The annulment of the Bankruptcy Order has the effect of putting the debtor in the same position as if no Bankruptcy Order had been made against him, but it does not release the debtor from any provable debts which have not been filed against him when the bankruptcy was in force.
What is a Discharge by the High Court?
A bankrupt may apply to the High Court to grant him an Order of Discharge. The Official may also apply to the High Court for the bankrupt’s discharge under Section 124 of the Bankruptcy Act (Chapter 20) if the proven debts exceed S$500,000.
The High Court will hear the Official Assignee and the bankrupt’s creditors before deciding whether to discharge him from bankruptcy. The High Court will consider facts such as the bankrupt’s age, earning capacity and his assets before deciding whether to discharge him. In addition, the High Court will also consider the amount of payments the bankrupt has contributed for the benefit of his creditors, whether any bankruptcy or other offences were committed, and generally, whether the bankrupt has co-operated fully with the Official Assignee in the administration of the bankruptcy estate.
What is a Discharge by the Certificate of the Official Assignee?
The Official Assignee may, at his discretion based on the bankrupt’s conduct in bankruptcy, and subject to the creditors’ objections, discharge the bankrupt provided at least three years have lapsed since the commencement of bankruptcy and where the proven debts do not exceed S$500,000.
In deciding whether to issue a Certificate of Discharge to the bankrupt, the Official Assignee will take into consideration factors such as:
the cause of bankruptcy;
the period of bankruptcy;
the bankrupt’s assets and payments to the bankruptcy estate for the benefit of his creditors;
the bankrupt’s conduct; and
the level of the bankrupt’s co-operation given to the Official Assignee in the administration of his bankruptcy affairs.
What are the processes involved for discharge from bankruptcy?
The Official Assignee will first review the bankrupt’s case to determine its suitability for discharge from bankruptcy. Depending on the outcome of the review, the bankrupt may have to raise additional funds with the assistance of a third party to make a debt settlement proposal to his creditors.
Thereafter, the Official Assignee will proceed to determine the full extent of the bankrupt’s liabilities by publishing an advertisement on the intention to declare dividends to the bankrupt’s creditors. The estimated cost of the advertisement is S$350 and it will be published in The Straits Times. Creditors will have 14 days to file their claims (or Proofs of Debt).
Upon the expiry of the advertisement, the Official Assignee will adjudicate the claims filed against the bankrupt’s bankruptcy estate before forwarding the debt settlement proposal to the bankrupt’s creditors for their consideration. The process generally takes at least six months, and varies depending on the complexity of the case.
What is adjudication and do I have a role to play in it?
Adjudication is a process whereby the Official Assignee examines every Proof of Debt filed against the bankruptcy estate and the grounds of the debt before admitting or rejecting the Proof of Debt, in whole or in part.
After the Proofs of Debt have been received, you will be asked to examine these claims at IPTO’s website. You will be given the opportunity to state whether you admit to or dispute the claims. In the event that you dispute the claim filed, you will be required to provide supporting documents in order for the Official Assignee to ascertain the extent of your liability. You may also be required to attend at the Official Assignee’s office to provide more details about why you are disputing the claim or the amount.
How do I get out of Bankruptcy?
There is no automatic discharge from bankruptcy in Singapore. However, you can get out of bankruptcy in these three ways:
a. Annulment of the Bankruptcy Order by full settlement or Offer of Composition or a Scheme of Arrangement;
b. Discharge by the High Court; or
c. Discharge by Certificate of the Official Assignee.
What is an annulment?
When a bankrupt repays his debt in full or makes a settlement offer which is accepted by a majority (in number) of his creditors who also comprise at least 75% of the total debt owed, the Bankruptcy Order made against him will be annulled.
In the case of a settlement offer, the outcome of the annulment is dependent on the creditors. If the creditors accept the proposal, a Certificate of Annulment will be issued under Section 95A of the Bankruptcy Act (Chapter 20).
The annulment of the Bankruptcy Order has the effect of putting the debtor in the same position as if no Bankruptcy Order had been made against him, but it does not release the debtor from any provable debts which have not been filed against him when the bankruptcy was in force.
What is a Discharge by the High Court?
A bankrupt may apply to the High Court to grant him an Order of Discharge. The Official may also apply to the High Court for the bankrupt’s discharge under Section 124 of the Bankruptcy Act (Chapter 20) if the proven debts exceed S$500,000.
The High Court will hear the Official Assignee and the bankrupt’s creditors before deciding whether to discharge him from bankruptcy. The High Court will consider facts such as the bankrupt’s age, earning capacity and his assets before deciding whether to discharge him. In addition, the High Court will also consider the amount of payments the bankrupt has contributed for the benefit of his creditors, whether any bankruptcy or other offences were committed, and generally, whether the bankrupt has co-operated fully with the Official Assignee in the administration of the bankruptcy estate.
What is a Discharge by the Certificate of the Official Assignee?
The Official Assignee may, at his discretion based on the bankrupt’s conduct in bankruptcy, and subject to the creditors’ objections, discharge the bankrupt provided at least three years have lapsed since the commencement of bankruptcy and where the proven debts do not exceed S$500,000.
In deciding whether to issue a Certificate of Discharge to the bankrupt, the Official Assignee will take into consideration factors such as:
the cause of bankruptcy;
the period of bankruptcy;
the bankrupt’s assets and payments to the bankruptcy estate for the benefit of his creditors;
the bankrupt’s conduct; and
the level of the bankrupt’s co-operation given to the Official Assignee in the administration of his bankruptcy affairs.
What are the processes involved for discharge from bankruptcy?
The Official Assignee will first review the bankrupt’s case to determine its suitability for discharge from bankruptcy. Depending on the outcome of the review, the bankrupt may have to raise additional funds with the assistance of a third party to make a debt settlement proposal to his creditors.
Thereafter, the Official Assignee will proceed to determine the full extent of the bankrupt’s liabilities by publishing an advertisement on the intention to declare dividends to the bankrupt’s creditors. The estimated cost of the advertisement is S$350 and it will be published in The Straits Times. Creditors will have 14 days to file their claims (or Proofs of Debt).
Upon the expiry of the advertisement, the Official Assignee will adjudicate the claims filed against the bankrupt’s bankruptcy estate before forwarding the debt settlement proposal to the bankrupt’s creditors for their consideration. The process generally takes at least six months, and varies depending on the complexity of the case.
What is adjudication and do I have a role to play in it?
Adjudication is a process whereby the Official Assignee examines every Proof of Debt filed against the bankruptcy estate and the grounds of the debt before admitting or rejecting the Proof of Debt, in whole or in part.
After the Proofs of Debt have been received, you will be asked to examine these claims at IPTO’s website. You will be given the opportunity to state whether you admit to or dispute the claims. In the event that you dispute the claim filed, you will be required to provide supporting documents in order for the Official Assignee to ascertain the extent of your liability. You may also be required to attend at the Official Assignee’s office to provide more details about why you are disputing the claim or the amount.