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Declaring bankruptcy, what happens next?

If your debts have become unmanageable, you might be thinking about declaring bankruptcy. While bankruptcy may be the only way out for some people, it also has serious consequences that are worth considering before you make any decisions.

A Bankruptcy Order is granted by the Court when it is satisfied that the debtor is unable to pay his debts. Upon being declared bankrupt, the debtor’s assets will be sold, and the proceeds will be put into the bankruptcy estate, which shall be managed by a court-appointed Official Assignee (OA) or private trustee (accountant or lawyer).


Official Assignee (OA)

The OA is a court-appointed officer that:

  • Oversees the bankrupt’s estate
  • Manage the bankrupt’s affairs
  • Assists the bankrupt to obtain a discharge from bankruptcy when conditions are met


Who can file for bankruptcy?

An application for bankruptcy can be filed voluntarily in Singapore by the debtor or against the debtor by the creditor(s) if they owe and cannot repay debts of at least S$15,000.


Why file for bankruptcy?

When a Bankruptcy Order is issued by the Court, the debt “freezes” at that point, preventing interest on the debt from further accruing. This prevents the debt from further snowballing, giving the debtor an opportunity to repay the debt due from the date of application.


Requirements to file for bankruptcy

A debtor (or the creditor(s)) can file to have the debtor declared bankrupt if the debtor falls within one of the following situations:

  • Is domiciled in Singapore
  • Has property in Singapore
  • Has been ordinarily a resident for at least 1 year
  • Had a place of residence in Singapore for a least 1 year
  • Carried on business in Singapore for at least 1 year


The debtor must be unable to repay the debt due and the sum exceeds S$15,000. The debtor will be regarded as being unable to pay his debts if:

  • Debtor has failed to comply with a statutory demand to pay the debt for at least 21 days
  • Debtor has failed to comply with a court issued execution to pay the debt
  • Debtor has fled the country to avoid repayment
  • The OA certifies that the debtor is unable to pay his debts.


Consequences of filing for bankruptcy:


1. Assets:

All assets will be form part of the bankruptcy estate and this will be controlled and manage by the OA. Assets that can form part of the bankruptcy estate include (1) anything of value belonging to the potential bankrupt and (2) any gifts given to the potential bankrupt at the date of (or after) the making of the Bankruptcy Order.

However, do note that assets falling under “protected assets” will be excluded from the bankruptcy estate. They include:

  • Property held by the potential bankrupt as a trustee for someone else;
  • The potential bankrupt’s HDB flat (if at least one flat owner is a Singapore citizen);
  • Monies in the potential bankrupt’s CPF account;
  • Life insurance policies held in express trust for the potential bankrupt’s spouse or children;
  • Any items/equipment required for the personal use in the potential bankrupt’s employment, business or vocation;
  • Equipment/furniture required for the potential bankrupt’s family’s needs;
  • The remainder of the potential bankrupt’s monthly income after deduction of the monthly contribution; and
  • Any annual bonus or annual wage supplement paid as part of the potential bankrupt’s income


2. Restriction of rights

Upon being declared bankrupt, the bankrupt is not allowed to

(1) borrow a sum of more than $500 without informing the lender that he is a bankrupt,

(2) be appointed a trustee or representative of any estate,

(3) commence any legal proceedings against another person (except for divorce and personal injury),

(4) leave Singapore without OA’s permission; and

(5) participate as a director or in management of any company (unless approved by the OA or the High Court).


3. Disclosure of bankruptcy

The bankrupt’s name will go into Singapore’s bankruptcy register and this register can be freely searched by the general public. Depending on how you get out of bankruptcy, it is possible to have your name removed from the register.



Alternatively, the bankrupt may choose to undergo external arrangements with his creditors to avoid the restrictions that come with a Bankruptcy Order. This may be done through a Debt Repayment Scheme (DRS), a Voluntary Arrangement (VA) or a Debt Consolidation Plan (DCP).

However, do note that these arrangements are subject to certain conditions and approval by the relevant parties.



If there is a low likelihood of paying debts in full, or it is not possible to make alternative private arrangements with creditors, it may be favourable, or even inevitable, to consider filing for bankruptcy.

Please note that this article does not constitute express or implied legal advice, whether in whole or in part. If you require legal advice, please contact us at:




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