Alternatives to Bankruptcy

1. Advice for Debtors
Do not ignore your creditors’ Letters of Demand, Statutory Demands, or Writs of summons from the Court. You can be made a bankrupt even if you refuse to respond to your creditors or decline to accept service of their documents.

2. Reasons to avoid bankruptcy
Difficulties in looking for a job
Restrictions in traveling overseas
Restrictions in obtaining credit greater than $1,000
Restrictions in managing a business or acting as a director of a company
No automatic discharge from bankruptcy in Singapore

3. Advice for creditors
Commencing bankruptcy proceedings will not guarantee the full recovery of the debts owed. You should only commence bankruptcy proceedings against your debtor when all other debt recovery options have been exhausted.

Other reasons to consider before commencing bankruptcy proceedings:

The cost of bankruptcy proceedings
The loss of interest on the principal sum owed after the making of the Bankruptcy Order
The low likelihood of recovering debts in full
After the bankrupt’s discharge from bankruptcy, debts which are not fully settled will be extinguished and creditors will not be able to further pursue the debts. (There are certain types of debts which will not be extinguished e.g. debts owed to the Singapore Government that remain unpaid will not be extinguished even after the bankrupt’s discharge from bankruptcy.)

4. Private Arrangement
Debtors may enter into a private arrangement with creditors to pay off their debts in instalments or in scheduled repayments. Debtors can also request for an extension of time to liquidate their assets to repay their debts.

Debtors should inform creditors of their latest financial position. They should provide information and documentary evidence truthfully and completely to prove their current financial position.

Debtors should make serious effort in keeping up with their repayment after entering into the arrangement.

5. Assistance from Voluntary Welfare Organisations
Debtors may also seek assistance from the following social service agencies at the addresses below:

a. Association of Muslim Professionals (AMP)
1 Pasir Ris Drive 4 #05-11
Singapore 519457

General line: 6416 3960
Email: corporate@amp.org.sg

b. Adullam Life Counselling
315 Outram Road #15-02 Tan Boon Liat Building
Singapore 169074

General line: 6659 7844 / 9423 8832
Email: admin@adullam.org.sg

c. Arise2Care Community Services
No. 5 Harper Road #02-01A
Singapore 369673

General line: 6909 0628
Email: admin@arise2care.sg

d. Blessed Grace Social Services
18 Arumugam Road, #05-01 Antioch@Macpherson
Singapore 409962

General line: 8428 6377
Email: billy.lee@blessedgrace.org

e. Credit Counselling Singapore
51 Cuppage Road #07-06
Singapore 229469

General line: 6225 5227 | Fax: 6338 6586
Email: enquiry@ccs.org.sg
Website: http://www.ccs.org.sg

f. One Hope Centre
8 New Industrial Road #04-04B LHK 3 Building
Singapore 536200

General line: 6547 1011
Email: help@onehopecentre.org

g. Silver Lining Community Services
(East) 11 Playfair Road Singapore 367986
(West) Jurong Spring CC, 8 Jurong West St 52 Singapore 649296

General line: 6749 0400
Email: admin@silverlining.com.sg

6. Voluntary Arrangement
Debtors may apply to Court for an interim order for a Voluntary Arrangement (VA). The VA is a negotiated debt settlement under Part V of the Bankruptcy Act. The debtor discloses his assets and liabilities, and makes a proposal on how he intends to settle his debts with various creditors. If the proposal is accepted by the creditors and implemented successfully, it will benefit both the debtor and his creditors.

7. Court Dispute Resolution
If you are a debtor being sued by your creditor under civil proceedings, you may negotiate for a settlement of the repayment of your debts and avoid bankruptcy.

8. Oral Legal Advice
The information provided above on bankruptcy matters is by no means exhaustive. You may wish to consult your solicitor before making any decision concerning bankruptcy. If you are unable to afford a solicitor, you may obtain legal advice from the Legal Aid Bureau (“LAB”). For more information, please visit LAB’s website.

9. Debt Repayment Scheme
The Debt Repayment Scheme (DRS) is a repayment scheme to assist debtors who have a regular income and debts not exceeding $150,000, to avoid bankruptcy.

The DRS is triggered by a bankruptcy application. When such an application is made to the High Court and the debt owed does not exceed S$150,000, the High Court may refer the debtor to the Official Assignee for an assessment of the debtor’s eligibility and suitability to enter into the DRS. If the debtor satisfies the relevant criteria, an administrator will devise a repayment plan requiring regular debt repayments to the creditors over a fixed period of time. Debtors who do not comply with the conditions of the scheme will be failed from the DRS. These debtors may subsequently face another bankruptcy application filed against them and be made bankrupt by the High Court.

For further information, please refer to the DRS page on this website.

10. Other Suggested Readings
Minlaw FAQs on Individual Insolvency
Information for Bankrupts

11. Further Queries
If you have any further queries on bankruptcy, please send in your enquiries/feedback at Contact Us @ OneMinLaw

Alternatively, you may visit us at our website at https://www.mlaw.gov.sg/ or contact us at 1800-2255-529* (during office hours).

*Airtime charges may apply to calls made from mobile phones to ‘1800’ local toll-free numbers.