Bankrupt in Singapore – You may be declared bankrupt if your debt is more than $15,000 and you are unable to pay up. Should your debt obligation be less than $100,000, you may be placed on the Debt Repayment Scheme, instead of being declared bankrupt. Debt Repayment Scheme is a pre-bankruptcy scheme which is administered by the Official Assignee.
Should you be declared bankrupt, the Official Assignee will manage your assets for distribution to your creditors. You will also require permission from the Official Assignee if you intend to leave the country, manage a business or sue someone in Court. You will also not be allowed to hold public office.
If you continue to work after declaring bankruptcy, you will be required to set aside a particular amount from your monthly salary to your bankruptcy estate. You can keep the remainder to support yourself and your family.
The bankruptcy period will be a challenging one and it will impact your life significantly as your bankruptcy records will be made available for a number of years. It is important to adopt a resilient and positive attitude towards your financial health so that you can get discharged from bankruptcy.
For more information on being Bankrupt in Singapore, head over to the Ministry of Law’s Insolvency office here.
CPF Matters
Your savings in the Central Provident Fund (CPF) are protected from creditors and/or the Official Assignee, regardless of how much you may have been sued for. You will still be able to apply for the withdrawal of your CPF savings as an undischarged bankrupt when you turn 55 or under medical grounds.
As an undischarged bankrupt, you will not be able to make new investments using your CPF savings under the CPF Investment Scheme. However, any of your previous investments under the CPF Investment Scheme will remain intact. Any profit made from the sale of your investments is protected from claims by creditors and/or the Official Assignee, as long as they remain within the CPF Investment Scheme.
You can also continue to service the payment for a regular premium insurance policy using your Ordinary Account (even if the balance is less than $20,000), as the savings are protected.
If you pass away as an undischarged bankrupt, your CPF savings will be distributed according to your CPF Nomination or as per Singapore’s intestacy laws (or Muslim inheritance laws). These monies will be protected from claims by creditors or the Official Assignee. However, the same protection is not extended to your CPF investments.
For latest information on CPF matters in relation to Bankruptcy in Singapore, do check out the CPF website.
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