Bankruptcy refers to a legal proceeding where a person is unable to pay up their debts completely. The ‘undischarged’ part refers to the state of still being bankrupt at such a moment. There are increasing numbers of undischarged bankruptcy in Singapore. According to the Bankruptcy and Insolvency Act, a person can declare or file a case of bankruptcy in cases where such a person is unable to pay the debt of at least $15,000. However, this act was repealed on 30 July 2020 by Insolvency, Restructuring, And Dissolution (Repeal Of Bankruptcy Act) Notification 2020.
What Does Bankruptcy Mean?
According to Insolvency, Restructuring and Dissolution Act 2018, “Bankruptcy means:
(a) an individual debtor who has been adjudged bankrupt by a bankruptcy order; or
(b) where a bankruptcy order has been made against a firm, each of the partners in the firm.”
Further, the Insolvency, Restructuring, and Dissolution Act 2018 also gives room for voluntary declaration or filing of bankruptcy. The benefit of filing a bankruptcy is that once it is issued, the debt is frozen, and the interest is frozen as well. The creditor’s pressure is reduced at such a point, and they are not entitled to sue the debtor. Instead, the debtor is made to make monthly payments to withdraw the bankruptcy case.
It is pertinent to understand that bankruptcy filing can negatively affect the debtor. For example, once the case of bankruptcy is declared, such a person does not have free will over their assets, flying out of the country is not possible without the OA/PTIB’s permission, can not hold a public office, etc. in the long run, and there is a restriction placed on the right of a debtor declared bankrupt.