Singapore recently has approved the Bankruptcy Amendment Bill, aimingto improve the bankruptcy regime, and ensuring that bankrupts have agreater certainty as to when they are eligible to be discharged.

Undera new framework, a first-time bankrupt who pays his target contributionin full can be discharged as early as three years. His name will alsobe removed from public records after five years from the date of hisdischarge.

Target contribution refers to the totalamount he has to pay to the bankruptcy estate before he is eligible fordischarge. This is equivalent to 52 monthly contributions for afirst-time bankrupt.

Those who fail to meet the targetcontribution will be eligible for discharge only after seven years.Their names will remain on record permanently.

In her speech atthe Country’s Parliament on July 13, Senior Minister of State for LawIndranee Rajah stressed that the changes aim to strike a balance betweenthe need to hold bankrupts accountable and allow them to have theopportunity to make a fresh start in their financial affairs after areasonable period of time.

Previously, a bankruptcy order couldbe made if the debtor owed at least 10,000 SGD in debts. This thresholdhas been raised to 15,000 SGD, to take into account of inflation.

Anotherchange is to allow creditors to make an expedited bankruptcyapplication. After a demand for payment has been issued on a debtor,creditors will no longer to wait for a 21-day period to lapse beforethey can file for a bankruptcy application.

However, thecreditor must show a serious possibility that the debtor’s property orits value will be significantly diminished.-VNA