Singapore - Changes To Singapore’s Bankruptcy Framework.

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Asia Pacific Legal Updates


23 August, 2016


Amendments in effect from 1 August 2016


On 1 August 2016, the Bankruptcy (Amendment) Act 2015 came into effect. The amendments to the existing bankruptcy framework in Singapore create a more rehabilitative environment for bankrupts and encourage creditors to exercise financial prudence when extending credit. The amendments relate to all bankruptcy applications filed on or after 1 August 2016, however the Insolvency Office will continue to manage existing cases, where appropriate, to ensure some parity of treatment for existing bankrupts.


The key amendments to the bankruptcy framework are:


Increased Debt Threshold


  • The minimum amount owed before a person can be made bankrupt has increased from S$10,000 to S$15,000.


Expedited Bankruptcy Application


  • After a demand for payment has been issued to a debtor, a creditor will no longer have to wait 21 days before filing a bankruptcy application.
  • However, a creditor must be able to show that there is a serious possibility that the debtor’s property or its value will be significantly diminished before the end of the 21-day period.


Mandatory Appointment of Private Trustees by Institutional Creditors


  • “Institutional creditors” are defined as either (i) banks and finance companies regulated by MAS; or (ii) business undertakings with annual sales turnover of more than $100 million and with more than 200 employees.
  • Institutional creditors will be required to nominate private trustees to be appointed to administer the bankruptcy estate when applying to make a debtor bankrupt.
  • The trustee must be either:
    • Registered as a public accountant under the Accountants Act;
    • An advocate and solicitor; or
    • Such other person as the Minister may, by order published in the Gazette, prescribe.
  • The trustee must not have been convicted of an offence involving fraud or dishonesty punishable on conviction by imprisonment for 3 months or more and must also consent in writing to be appointed as trustee.


Claims by Creditors


  • Secured creditors now have 12 months instead of six months from the date of the Bankruptcy Order to realise and claim post-bankruptcy interest on the debtor’s assets.
  • Creditors must file a proof of debt within four months of the Administration Date. 


Introduction of Differentiated Discharge Regime


  • First-time bankrupts will generally be eligible for discharge within five to seven years. Repeat bankrupts will generally be eligible for discharge within seven to nine years.
  • A key consideration in assessing a bankrupt’s eligibility for discharge will be whether he has paid his “Target Contribution” in full, which is determined based on the bankrupt’s earning potential.
  • Bankrupts who pay their Target Contribution in full prior to discharge will have their names removed from the public register five years after discharge, while those who fail to do so will have a permanent record of their bankruptcy on a public register. 




For further information, please contact:


Smitha Menon, Partner, Wong Partnership

[email protected]