One thing bankrupts have to get used to is a disruption to their regular lifestyle.

bankruptcy in singapore

If you were unfortunate enough to declare bankruptcy, contemplating the day the end of your financial woes will be a natural reaction. However, before you can look to the horizon or even start planning out your course of action, it is important to identify the things you can or cannot do.

One thing bankrupts have to get used to is a disruption to their regular lifestyle.

Services and subscriptions will be cut promptly once you have declared, and it is not possible to reapply under your name. All investments, properties and insurance will also be terminated or seized.

This also results in you losing access to trivial everyday things like taking a taxi, having a phone line or going on a holiday.

Yet, owning a phone can be necessary, so it may be possible to use a pre-paid card or have the line applied under a family member or friend who has no such financial concerns. The same goes with a car; you can still drive as long as you do not own the car. If there is a necessity, check with your Official Assignee (OA) if this is permissible.

You will not be able to dine at restaurants, however. Even buying luxury items is prohibited. Gifts, too, must be declared.

If you are going on a holiday sponsored by someone else, the OA must first be approached for permission, and you must reveal who the person paying for the holiday is. You cannot pay for a holiday for you and/or your family on your own. Leaving Singapore without approval will result in a jail term of not more than two years, a $10,000 fine or both.

As the OA is a public servant and an officer of the court, he or she will be able to call for a discharge every three years, depending on your behaviour. Therefore it is important to ‘play by the rules and if you are not sure of anything, run it by the OA no matter how insignificant it might sound.

Please take note that even though the OA can call for a discharge, your creditors reserve the right to renounce it, thus keeping you bankrupt until either all or a significant amount of your dues as determined by the creditors is paid. To ensure a smooth discharge, it is advisable to pay some money every month to remain in the ‘Green Zone.

Doing so shows that you are at least committed to your recovery by making an effort to pay off your debts despite your situation. Those in the ‘Green Zone’ are usually allowed certain liberties such as relaxed travelling options.

The OA will also take possession of all your assets and items that can be divided or liquidated to pay your creditors. However, things like your HDB flat, properties held in trust, your CPF monies, basic everyday necessities for you and your family and all tools and items relevant to your work will not be touched.

You are also not allowed to apply for a credit card with any major banks. All existing bank accounts will be terminated, and the OA will assist you in setting up a new savings account. Cash withdrawals, ATM usage, and GIRO deductions will be allowed; in which case, all monthly deductions will be paid through the usage of GIRO. You must ensure that your account has sufficient money for the regular deductions.

Lastly, a percentage of your pay that is deemed ‘reasonably necessary to support yourself and your family will be allowed. You are expected to declare your monthly income and work out a suitable amount for your daily expenses. At the same time, the remainder will be surrendered to the OA and then divided among your creditors. Your expenses will be watched and held against you through the Statement of Affairs should you fail to adhere to it.

Any attempt to omit information or include false and misleading material will result in you being jailed, fined or both. Failure to submit this Statement of Affairs without a valid reason will result in the same penalty. The Statement of Affairs must be submitted within 21 days starting from the date the bankruptcy order is made against you.

To end and recap, here are the things you absolutely cannot do;

  • Own a phone subscription
  • Own any luxury items (from apparel to entertainment mediums like cable TV)
  • Own a car
  • Own properties/investments/insurance
  • Pay and go on holidays
  • Pay for taxi rides unless otherwise stated by OA
  • Apply and own credit cards
  • Cannot be a business/company director or higher without prior approval from OA
  • Cannot sign any checks
  • If $500 or more is borrowed, your status must be declared to the lender
  • You cannot sell your assets or any items of value without prior approval from OA

Things you can do are;

  • Take public transport (bus/MRT)
  • Support your family
  • Retain tools of your trade (such as items necessary for your work)
  • Retain properties that are held in trust by you for someone else
  • Retain a portion of your income necessary for the daily upkeep of you and your family
  • Retain all of your CPF monies
  • Retain your HDB flat or apply for one provided it is within your CPF means

To be certain of the things you can and cannot do, make sure to check and double-check with your OA.



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