A debtor is a party who owes a sum of money to another party, called the creditor.
As a debtor, you may apply to make yourself a bankrupt, or your creditors may apply to make you a bankrupt.
In either case, you should consider what it means to be a bankrupt and the alternative options.
If a bankruptcy order is made against you, you will have to fulfil duties as a bankrupt. Examples include:
Refer to Section 399(1) of the Insolvency, Restructuring and Dissolution Act for more information.
There is no automatic way to get out of bankruptcy. You will have to take steps to repay your debt or apply to be discharged as a bankrupt.
If you are a bankrupt, you may face restrictions related to:
You can only leave Singapore if you get the trustee's prior permission.
You cannot manage a business or act as a director of a company, unless with the permission of the court or the written permission of the Official Assignee.
You must disclose your bankruptcy status to the lender if you are applying for a credit or loan of at least S$1,000.
You cannot start or continue court actions without the trustee's prior approval. This excludes any of the following:
You are disqualified from being appointed or acting as a trustee or personal representative in respect of any trust, estate or settlement unless you obtain the General Division of the High Court's permission to do so.
Read more about the duties and responsibilities of a bankrupt on the Ministry of Law's website.
You can try different ways to repay your debts without being declared a bankrupt. Examples include:
If you are unable to repay the entire debt, you may try to negotiate with your creditors to reach an agreement, such as paying your debts in instalments or in scheduled repayments. You can try to request for an extension of time to sell your assets to repay your debt.
You should inform your creditors of your latest financial position, and provide information and evidence to prove that. This agreement does not involve the court.
During a bankruptcy hearing, the court will consider whether you qualify for the Debt Repayment Scheme (DRS).
This is a pre-bankruptcy scheme by the Official Assignee. It aims to help eligible debtors with debts not more than $150,000 avoid bankruptcy through a debt repayment plan.
As the debtor, you must satisfy all these criteria:
If you satisfy all these criteria, the court may adjourn the hearing for the Official Assignee to assess if you are suitable for the DRS.
If you are found to be suitable, the DRS will start. The court will treat the bankruptcy application as withdrawn. You will have to fulfil your duties as a debtor under the DRS.
If you are found to be unsuitable, the court will schedule another hearing for the bankruptcy application. You may be declared bankrupt at that hearing.
Note: The DRS is administered by the Official Assignee, who is assisted by the Ministry of Law's Insolvency Office. Find out more about the DRS on the Ministry of Law's website.
No, you must file a bankruptcy application to initiate the process. The court will only consider whether your case qualifies for the Debt Repayment Scheme during the hearing of the bankruptcy application.
You should approach your bank for clarification as to why it has done that. You may also wish to clarify whether you agreed in the past that your bank may take such measures if a bankruptcy application is filed against you.