Can I buy a HDB flat if I’m bankrupt?
Yes. You can buy a five-room HDB flat or smaller without the consent of your Official Assignee. For a HDB executive or maisonette flat, you will need to seek special permission and provide proof that you can afford, and need, such a big flat.
Can I travel?
You’ll need to apply for permission from your Official Assignee at least 14 days before your trip, and furnish the reasons, destination and length of travel. Technically, if you’re bankrupt, you are not allowed to pay for holidays. If your friend is paying for the trip, you will need to provide his details. But in reality, leisure trips are rarely approved.
Work trips will have to be supported by a company letter. If your job involves frequent travel, you can make a block booking for your travel periods instead of applying for each trip. However, final approval will depend on your Official Assignee’s review of your performance.
If you attempt to leave the country and get stopped at Customs, your passport will be impounded. If you travel without permission, you can expect to be fined up to $10,000 and/or be jailed up to two years.
How else will bankruptcy affect my lifestyle?
You can’t own a car but you can still drive a vehicle that doesn’t belong to you, subject to the approval of your Official Assignee. He or she will also advise you on other dos and don’ts. For example, you must take public transport, you cannot dine at restaurants or purchase luxury goods, or even enjoy frills like subscribing to cable TV. Any gift you receive has to be declared.
You cannot be a business owner or company director unless you have the go-ahead from your Official Assignee, who must also approve any asset sale. Borrowing money? Anything more than $500 and you will have to declare your bankruptcy status to the lender.
How do I get discharged from bankruptcy?
Currently, bankrupts in Singapore are not automatically discharged from bankruptcy.
You have to settle your debts in full or make a settlement offer that is accepted by the majority of your creditors, who must represent at least 75 per cent of your total debt. If your creditors agree, you will be issued a certificate of annulment of the Bankruptcy Order. However, this only absolves you of the debts that were filed during your bankruptcy.
Another way is to apply to the High Court to seek an order of discharge; if your debts exceed $500,000, the application has to be filed by your Official Assignee. The High Court will consider factors such as your Official Assignee’s review, the amount of monthly instalment payments you’ve made to your bankruptcy estate, as well as your age, earning capacity and assets, before making a decision. Of course, being cooperative and committed to settling your debts, and not committing any offences during your bankruptcy, will also work in your favour.
You can also get your Official Assignee to give you a Certificate of Discharge if you have been bankrupt for at least three years and your debts do not exceed $500,000. Factors like your conduct and how regularly (and how much) you’ve made monthly payments to your bankruptcy estate will be taken into account. The decision will also hinge on whether your creditors agree to your discharge.
If the proposed changes to the Bankruptcy (Amendment) Bill go through, a new framework will help bankrupts get discharged more easily. They will pay a target contribution, calculated based on their earning potential, to get them on track to clearing their debts. Even if they cannot pay off the full amount, first-time bankrupts will be discharged after seven years while repeat bankrupts will have to wait nine years.
However, under the proposed regulation, bankrupts will not be automatically removed from the public records five years after their discharge, as per the current practice. Those who do not pay their target contribution in full prior to their discharge will be listed permanently. This will help creditors decide if they are willing to offer loans to a former bankrupt.