“How to avoid bankruptcy?” is usually the million-dollar question on most debtors’ minds. While nobody wants to become bankrupt due to reasons such as difficulty landing a job and other societal stigmas, it is still often considered one of the solutions for debtors in Singapore.
Regardless of whether you have been served Writs of Summons or are simply wondering how you can avoid bankruptcy, this article in which we debunk the common misconceptions about being bankrupt will help you to clarify any doubts.
Read on to find out more.
1. Bankrupts cannot travel
One of the most common misconceptions surrounding bankruptcy is the inability to travel out of Singapore. Rather than not being able to travel overseas, you will need to obtain approval from your Official Assignee (OA) beforehand, which can seem like a hindrance to many.
Bankrupts can travel overseas for both work and leisure purposes and the OA may approve travel in blocks of three or six months, especially if you require frequent traveling due to work commitments.
However, your ability to travel overseas as a bankrupt is entirely dependent on your OA’s permission and those under the Green Zone tend to get their applications approved more compared to others in the Red Zone.
2. Everybody will know I am bankrupt
It cannot be denied that there are some negative associations when it comes to bankruptcy and hence, nobody wishes for it to be announced to the public as it may jeopardize jobs and relationships.
But if that is your main worry, you can rest assured that people will only find out you are bankrupt when they search for your name in Singapore’s bankruptcy register and this list can only be assessed with a fee involved.
On the other hand, some employers such as those in the financial sector may search the register before hiring you. Although it is inevitable, coming up with a debt solution to get out of debt soon will be most beneficial for you, which brings us to our next point.
3. My name will be in the bankruptcy register forever
This is not true because as long as you fully pay your target contribution, your name will be removed from the bankruptcy register five years following discharge.
Your name will only remain in the register should you not be able to fully pay off your target contribution, even though you can still be discharged from bankruptcy.
Once you are discharged from bankruptcy, you will be released from all outstanding debts except for some such as debts owed to the government and debts due to breach of contract.
Unsure about how you can pay your target contribution? A debt consultancy in Singapore will be able to advise you.
4. There is no need for me to declare my expenses
Bankrupts who are employed will have to contribute monthly to their bankruptcy estate and the amount will be assessed by your OA after taking into account what you need for yourself and your family.
You will then be required to submit an Income Declaration when filing your Statement of Affairs at the OA’s office and this information will have to be updated together with your Statement of Monies and Properties every six months.
Therefore, assets, liabilities, current employment status and monthly expenses must all be declared.
5. All of my assets will be controlled by my OA
Assets refer to anything of value belonging to you and gifts given to you before your discharge from bankruptcy.
Nonetheless, there are still protected assets that your creditors cannot touch such as HDB flats whereby one of the owners is a Singaporean, monies in your CPF account, life insurance policies and more.
Reach Out To Debt Aid For Assistance
If you have received a bankruptcy petition and are unsure of your next steps, get in touch with Debt Aid Sg, a debt consultancy in Singapore.
We debunk the myths about bankruptcy and provide customers with personalized debt solutions that will help them to get out of debt quickly so they may not even have to resort to bankruptcy in the end.