Official Assignee strives to ensure that bankrupts make genuine efforts to repay their creditors
Letter from Beverly Wee Assistant Official Assignee for Official Assignee
We refer to “Woes of the creditor” (Dec 2), from Mr. Jimmy Ho Kwok Hoong. We would like to explain some features of our bankruptcy regime.
Bankruptcy, with its implications and restrictions, is a drastic measure that should be resorted to only when all other viable measures to enforce debt repayment have been exhausted. Hence, Singapore’s bankruptcy regime is designed to balance the interests of creditors in recovering their debts and those of debtors in seeking to give them a second chance.
The debt threshold in Singapore whereby bankruptcy proceedings can be initiated against a debtor ($10,000) is comparable to the threshold of RM30,000 ($12,388) in Malaysia, whose bankruptcy regime is similar to ours. Although these thresholds are higher than those in jurisdictions such as Australia ($1,966) and Hong Kong ($1,943), these jurisdictions have provisions for bankrupts to be automatically discharged after a certain period of time while there is no automatic discharge of bankrupts under our regime.
Mr. Ho’s observation that “a significant proportion of bankrupts are discharged after only three years into bankruptcy, with merely a token payment” is inaccurate. In the administration of bankruptcy cases, the Official Assignee strives to ensure that bankrupts make genuine efforts to repay their creditors. These efforts are taken into consideration when the Official Assignee reviews a bankrupt’s application for discharge. Most bankrupts spend an average of eight years in bankruptcy before obtaining a discharge.
Mr. Ho’s comments about the Official Assignee’s notices of intention to discharge are also inaccurate. Before a bankrupt can be discharged, the Official Assignee sends such notices to the bankrupt’s creditors, together with a brief report regarding the administration of the bankruptcy estate. These notices inform creditors that they may write to the Official Assignee within 21 days of the date of the notice, should they have any objections. The Official Assignee will consider any objections received in determining whether to discharge the bankrupt.
Where the mode of discharge is by way of the Official Assignee’s application to the High Court, creditors are also informed of the hearing date of the application and that they may attend the hearing to make their objections known to the Court. The Court will then determine if the application to discharge the bankrupt should be allowed.
Mr. Ho also wrote about the enforcement process carried out by the Subordinate Court bailiffs pursuant to a Writ of Seizure and Sale (WSS) filed by a creditor. As part of the due legal process, the bailiff is required to notify the debtor of the WSS process before the seizure. This makes the seizure process more efficient and enables the bailiff to avoid having to make a forced entry into the debtor’s premises. It also gives the debtor a final opportunity to settle the debts with his creditors before seizure is effected. If a debtor attempts to dispose of his property fraudulently before the seizure, he can be imprisoned for up to three years and/or fined under Sections 421 to 424 of the Penal Code.
Singapore’s bankruptcy framework seeks to achieve the appropriate balance between the interests of creditors and debtors. It is also carefully structured to give lenders the confidence to extend credit whilst discouraging individuals from borrowing and acting irresponsibly.
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Bankruptcy - Seeking to Achieve a Fine Balance
TODAY
15 December 2008
Official Assignee strives to ensure that bankrupts make genuine efforts to repay their creditors
Letter from Beverly Wee
Assistant Official Assignee for Official Assignee
We refer to “Woes of the creditor” (Dec 2), from Mr. Jimmy Ho Kwok Hoong. We would like to explain some features of our bankruptcy regime.
Bankruptcy, with its implications and restrictions, is a drastic measure that should be resorted to only when all other viable measures to enforce debt repayment have been exhausted. Hence, Singapore’s bankruptcy regime is designed to balance the interests of creditors in recovering their debts and those of debtors in seeking to give them a second chance.
The debt threshold in Singapore whereby bankruptcy proceedings can be initiated against a debtor ($10,000) is comparable to the threshold of RM30,000 ($12,388) in Malaysia, whose bankruptcy regime is similar to ours. Although these thresholds are higher than those in jurisdictions such as Australia ($1,966) and Hong Kong ($1,943), these jurisdictions have provisions for bankrupts to be automatically discharged after a certain period of time while there is no automatic discharge of bankrupts under our regime.
Mr. Ho’s observation that “a significant proportion of bankrupts are discharged after only three years into bankruptcy, with merely a token payment” is inaccurate. In the administration of bankruptcy cases, the Official Assignee strives to ensure that bankrupts make genuine efforts to repay their creditors. These efforts are taken into consideration when the Official Assignee reviews a bankrupt’s application for discharge. Most bankrupts spend an average of eight years in bankruptcy before obtaining a discharge.
Mr. Ho’s comments about the Official Assignee’s notices of intention to discharge are also inaccurate. Before a bankrupt can be discharged, the Official Assignee sends such notices to the bankrupt’s creditors, together with a brief report regarding the administration of the bankruptcy estate. These notices inform creditors that they may write to the Official Assignee within 21 days of the date of the notice, should they have any objections. The Official Assignee will consider any objections received in determining whether to discharge the bankrupt.
Where the mode of discharge is by way of the Official Assignee’s application to the High Court, creditors are also informed of the hearing date of the application and that they may attend the hearing to make their objections known to the Court. The Court will then determine if the application to discharge the bankrupt should be allowed.
Mr. Ho also wrote about the enforcement process carried out by the Subordinate Court bailiffs pursuant to a Writ of Seizure and Sale (WSS) filed by a creditor. As part of the due legal process, the bailiff is required to notify the debtor of the WSS process before the seizure. This makes the seizure process more efficient and enables the bailiff to avoid having to make a forced entry into the debtor’s premises. It also gives the debtor a final opportunity to settle the debts with his creditors before seizure is effected. If a debtor attempts to dispose of his property fraudulently before the seizure, he can be imprisoned for up to three years and/or fined under Sections 421 to 424 of the Penal Code.
Singapore’s bankruptcy framework seeks to achieve the appropriate balance between the interests of creditors and debtors. It is also carefully structured to give lenders the confidence to extend credit whilst discouraging individuals from borrowing and acting irresponsibly.
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