In Singapore, bankruptcy is usually considered a last resort option. You should only file for bankruptcy after careful consideration of your options.

If it is the best way to deal with your financial problems, filing for bankruptcy may be for you. This article cannot explain every aspect of the bankruptcy process.

If you still have questions after reading it, you should speak with our bankruptcy lawyers.

1. If my spouse is the guarantor of my debt, should he/she apply to make himself/herself bankrupt as well?

If your spouse is able to fulfil his/her obligations as your guarantor, it is unlikely that your spouse will be required to make such an application. This is because Singapore court will not grant a bankruptcy order unless it is satisfied that the debtor is unable to pay his/her debts. This also applies to creditor’s bankruptcy applications. 

2. If I file a Debtor’s Bankruptcy Application to make myself bankrupt, should I inform all my creditors about my application?

There is no requirement in law for you to do so. 

3. Will the execution of a writ of seizure and sale against me be stopped if I file an application to make myself bankrupt?

No, the application will not stay or stop the execution of a writ of seizure and sale. 

4. Can I still execute the Writ of Summons against my debtor after he is made a bankrupt?

No. What you can do is file a proof of debt against them. At this point, all their affairs are administered by the OA.

5. I have made an alternative proposal for payment to my creditor, but I have not heard from my creditor or its lawyers. Do I need to attend the bankruptcy hearing?

Yes. You should attend the hearing and inform the court that you have attempted to contact your creditor and its lawyers but did not receive any response.

Your creditor’s lawyers will inform the court whether your proposal will be accepted, and if so, its lawyers will either apply for an adjournment o monitor your payments, or withdraw the bankruptcy application against you.

If your creditor does not accept the proposal, the court may adjourn the hearing to give you more time to make an alternative proposal, or the court may make a bankruptcy order against you.

6. What will happen if I do not attend the bankruptcy hearing in Court?

If you have filed a debtor’s application and do not attend the bankruptcy hearing, the application may be adjourned to a later hearing date or dismissed by the court. 

If a creditor has applied to make you bankrupt and you do not attend the hearing, a bankruptcy order may be made against you in your absence.

7. A bankruptcy order has been made against me. I was not aware of the bankruptcy proceedings against me. How do I set the bankruptcy order aside?

To set aside the bankruptcy order, you will need to file a Summons (Bankruptcy) and an Affidavit (Bankruptcy). After filing, you have to serve the documents on your creditor and the Official Assignee.

At the hearing, the court will determine the merits of your application to set aside the bankruptcy order.

8. Will divorce save me from my spouse’s creditors?

The only advantage of getting a divorce is to determine the amount of matrimonial assets your spouse would get. With a divorce, unless you are a guarantor for your spouse’s debts, creditors will not come after you.

However, it is recommended that you not leave your savings in any joint account as a bank may deduct money from the joint account to satisfy part or all of the debt.

If it is a credit line, overdraft facility or credit card account, both of you are jointly and individually liable for the credit spent. You are advised to withdraw your name from the account, and pay off the debt in full and close the account to stop further action against you. 

9. How do I protect my assets if my spouse is declared bankrupt?

Your spouse’s creditors only have claims over money that is held in your spouse’s name, whether solely or jointly with any other person.

Unless you or your children acted as guarantors for your spouse’s debts or are co-borrowers, your spouse’s creditors cannot touch your money or assets.

However, with regard to non-essential items in your home, if your spouse’s creditors have obtained a writ of seizure and sale against such items, you must prove that you alone paid for these items in order to prevent the creditors from auctioning off the items.

10. Will my family be liable for my debts? E.g. a child being liable to the debts of his father?

Creditors may make the family members of a bankrupt liable only if the family members are co-borrowers on a mortgage loan, an unsecured line of credit or under a hire-purchase agreement.

Family members may also be made liable if they acted as guarantors for the bankrupt’s debts. 

11. Will any proceeds from a sale of property go to the bankrupt? 

After full payment has been made to a bankrupt’s creditors, the bankrupt shall be entitled to any surplus. However, proceeds from the sale of investments made prior to bankruptcy using CPF monies will be credited into the bankrupt’s CPF Investment Account or Special Account. 

12. Can I trade in shares?

A bankrupt is allowed to sell previously owned shares but he is not allowed to purchase any new shares.

13. A bankrupt borrows from me without informing that they are an undischarged bankrupt. What can I do?

Write to the OA office for their investigation. 

14. What if the debtor is unhappy with the payment plan under the Debt Repayment Scheme?

The debtor who is unhappy with the plan or any modification made to it may file an appeal with the Appeal Panel. The notice of appeal must be filed no later than 14 days as of the OA’s notice of the approved scheme.

15. What if the debtor’s personal circumstances change after the commencement of the payment plan?

The debtor must inform the OA of any change in his personal circumstances, particularly where the change may affect his ability to comply with the terms of the Plan. The OA may then consider modifying the plan. 

Conclusion – How We Can Help

If you have further questions that are not answered by the above, and are facing problems in relation to bankruptcy whether as a debtor or creditor, please contact our lawyers and we will have a fruitful consultation on your issues and your available options. 

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