Discharge from Bankruptcy

1. How do I get out of Bankruptcy?
There is no automatic discharge from bankruptcy in Singapore. However, you may 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.

2. 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 representing 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 Cap. 20, 2009 Rev Ed or section 358 of the Insolvency, Restructuring and Dissolution Act 2018.

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.

3. 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 Assignee may also apply to the High Court for the bankrupt’s discharge under section 124 of the Bankruptcy Act Cap. 20, 2009 Rev Ed or section 394 of the Insolvency, Restructuring and Dissolution Act 2018.

The High Court will take into consideration the views of 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 monthly instalment payments the bankrupt has contributed to his bankruptcy estate for the benefit of his creditors, whether any bankruptcy offences were committed, and generally, whether the bankrupt has co-operated fully with the Official Assignee in the administration of the bankruptcy estate.

4. What is a Discharge by the Certificate of the Official Assignee?
The Official Assignee may discharge the bankrupt from bankruptcy provided at least three years have lapsed since the commencement of the 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:

Whether the bankrupt has met the Expected Dividend or the Target Contribution;
Whether the bankrupt has property available which remain to be realised;
The period that the bankrupt has been in bankruptcy;
The cause of bankruptcy;
The bankrupt’s general conduct in bankruptcy and the level of the bankrupt’s co-operation in the administration of the bankruptcy estate;
Whether the bankrupt had committed any offence leading up to or during bankruptcy which adversely impacted one or more creditors. These include (but are not limited to) offences under the Bankruptcy Act, the Insolvency, Restructuring and Dissolution Act and the Penal Code; and
Whether there are valid objections from the bankrupt’s creditors to the bankrupt’s discharge.

Any indicative timeline for a discharge is not guaranteed. The eventual duration of your bankruptcy will depend on the factors listed above.

5. What are the processes involved for discharge from bankruptcy?
The Official Assignee will first review the bankrupt’s case to determine its suitability for a 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.

After that, the Official Assignee will proceed to determine the full extent of the bankrupt’s liabilities by publishing an advertisement on the Official Assignee’s 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) with the Official Assignee.

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 according to the complexity of each case.

6. What is adjudication and do I have a role to play in it?
Adjudication is a process where the Official Assignee examines every Proof of Debt filed against the bankruptcy estate and the basis of the claim before admitting or rejecting the Proof of Debt, in whole or in part.

After receiving the Proofs of Debt, you will be asked to examine these claims at our e-services website.

You will be asked to admit to or dispute the claims. In the event that you dispute the claim filed, you will be required to provide supporting documents to substantiate your dispute. The Official Assignee will then ascertain the extent of your liability after going through the documents. 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.

Other information for bankrupts