Singaporeans aged 65 and above who Have Remained in Bankruptcy beyond Five Years

Mr Png Eng Huat asked the Minister for Law (a) what is the current number of Singaporeans aged 65 and above who have remained in bankruptcy beyond five years; (b) what is the number of such Singaporeans who have been made bankrupt by Government agencies; and (c) what are these agencies.

The bankruptcy regime is designed to balance the interests of individual debtors, creditors and the wider society. It seeks to ensure that bankrupts deal with their debts as best as possible while allowing them to make a fresh start in their financial matters after a reasonable period of time.

As at end October 2018, there were 964 Singapore Citizens aged 65 and above who had been in bankruptcy for over five years1. This comprises around 6% of the overall number of bankrupts in Singapore. Most of these individuals became bankrupt before they reached 65 years of age.

Of the 964 individuals, Government agencies were the petitioning creditors for 37 individuals. The agencies involved were the Housing and Development Board (HDB), Ministry of Manpower (MOM) (Controller of Work Permits), Inland Revenue Authority of Singapore (IRAS) (Comptroller of Income Tax) and the Land Office (the predecessor of Singapore Land Authority).

Government agencies would first make several requests for payment. They will also see what other methods are possible to recover arrears. When these avenues fail, or are not feasible, then a petition for bankruptcy will be filed.

Agencies not infrequently come across individuals who will not pay unless action is taken. Monies owed are taxpayers' money and agencies owe a duty to take steps to recover them.

Bankrupts may be discharged after a reasonable period of time. To help rehabilitate bankrupts, the Ministry of Law (MinLaw) has implemented the differentiated discharge framework since 1 August 2016. This framework provides timeframes and goals for bankrupts to meet to be eligible for a discharge. The bankrupt’s eligibility for discharge will depend on whether he has met his Target Contribution to the bankruptcy estate. The new framework allows bankrupts who pay their target contributions expeditiously to be eligible for an earlier discharge.

Should any individual face difficulty paying their target monthly contributions due to extenuating circumstances, they are encouraged to inform the Official Assignee (OA). The OA who will take these circumstances into account in administering the bankruptcy. Any repayment under the bankruptcy regime also takes into account the need for the debtor to fulfil his basic necessities. The OA may reduce the monthly contributions of a bankrupt person if he can show that his personal circumstances have changed and he can no longer pay the previously agreed monthly contribution. The bankrupt person may also be eligible for an earlier discharge if the OA is satisfied that he is unable to pay his target contribution due to extenuating circumstances.