What is Bankruptcy?
Bankruptcy is a legal status declared upon a person when they are unable to pay off their debts. If a person owes someone $15,000 which is payable immediately and is unable to repay, such person is declared bankrupt.
What are the Benefits of Filing for Bankruptcy Voluntarily?
There are certain benefits if a person files for bankruptcy voluntarily. The bankruptcy regime in Singapore is aimed to help both the debtor and the creditor stabilize their finances.
1) No more accumulation of debt
2) Lower monthly repayments
3) No more legal proceedings
Why should You Seek Professional Help?
In Singapore, a debtor who owes and cannot repay debts of at least $15,000 can voluntarily file for bankruptcy. By filing bankruptcy proceedings in court, the debtor’s creditors can also try to declare the debtor bankrupt. When you notice that you can’t keep up with your payments and responsibilities, bankruptcy may be the first thing that comes to mind. It may be the best option for you. However, you should understand your alternatives, how the bankruptcy process works, and how it will affect you and your family before filing bankruptcy. These are some of the most important reasons why you should seek professional help before filing for bankruptcy.
What is the Minimum Amount to File for Bankruptcy?
For the High Court to declare someone bankrupt, certain criteria must be fulfilled. The debtor must owe an amount of at least $15,000 to the creditor, which is due immediately, and he is unable to repay.
What are the Other Requirements to File for Bankruptcy?
Section 310(1) of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA), states that the debtor must fall into either one of these categories.
1) The debtor is domiciled in Singapore.
2) The debtor has property in Singapore.
3) The debtor has had a place of residence in Singapore for at least one year.
4) The debtor has been an ordinary resident in Singapore for at least one year.
5) The debtor has carried on business in Singapore for at least one year.
Why is Engaging a Lawyer a Better Option?
A lawyer is a professional who specializes in different areas of law. Because the law is such a broad discipline, most professional attorneys focus on one or two important areas, such as Bankruptcy Law, Intellectual Property, Family Law, Commercial Law, and Securities Law. From conveyancing to civil lawsuits, they handle all elements of the legal practice. As a result, they are well-versed in the law, can represent their clients in court, and choose the best course of action in a legal issue.
Who is a Bankruptcy Lawyer?
A bankruptcy lawyer specializes in providing legal advice to clients regarding bankruptcy, as well as preparing legal paperwork, representing clients in court, and assisting with the process of DRS.
What can Lawyers Advise you on Bankruptcy Matters?
A lawyer can advise you on the following issues as your guide through the procedure.
- Whether or not to file for bankruptcy?
- Which bankruptcy should you file?
- What is the procedure for filing for bankruptcy?
- Which forms from the court must be filled out?
- What types of debts are amenable to reduction or elimination?
- Whether you’ll be allowed to keep your house, vehicle, or other valuables when your bankruptcy case is completed?
Overall, a bankruptcy lawyer can help you through the legal system. You may make legal blunders that have long-term financial ramifications if you manage a bankruptcy case without the assistance of a lawyer.
What are the Documents Needed to File for Bankruptcy?
One needs to obtain and complete the following documents. A lawyer can help you obtain and fill out these documents.
i) Debtor’s Bankruptcy Application
ii) Statement of Affairs (declaring assets, liabilities, current employment status, monthly expenses, etc.)
iii) Affidavit in Support of Debtor’s Bankruptcy Application
iv) Affidavit verifying Statement of Affairs
Why is a Bankruptcy Lawyer Needed?
A lawyer can be required in a self-bankruptcy application for several reasons. Few reasons for engaging a lawyer can be:
- You’re hesitant to handle the bankruptcy case on your own. It might be daunting to represent oneself in court, therefore a bankruptcy lawyer can handle legal problems for you.
- The paperwork is causing you concern. Typical court proceedings involve a large amount of paperwork. For example, if you fill out documentation improperly or submit it after the deadline, your bankruptcy case may be jeopardized. A bankruptcy lawyer can help you stay on track with your paperwork, including any papers you’ll need to submit (such as credit card bills).
- You’re sick of getting phone calls from debt collectors. A bankruptcy lawyer can deal with debt collectors if they are frequently bothering you. When you notify a debt collector that you have a lawyer, the collector is supposed to contact the lawyer instead of you.
What are the Disadvantages of Filing for Bankruptcy Without a Lawyer?
The drawbacks include being inexperienced with the legal procedure (unless you’re a lawyer), having to fill out several legal documents, maybe making mistakes on those forms, and failing to meet court-ordered deadlines.
What should You Expect from a Bankruptcy Lawyer?
Bankruptcy, like other legal complications, is a process, and if you want to succeed, you need to have an expert help you through it. If a good bankruptcy lawyer provides at least these four services, you will have peace of mind:
- An introductory session to acquire a better understanding of your situation.
- Advice on different alternatives, such as the sort of bankruptcy to file.
- Completed the documentation required to file for bankruptcy.
- When the matter gets to court, representation is provided.
What are the Indicators that You Need a Bankruptcy Lawyer?
When warnings go unheeded, it’s possible that your money might burn out, and it’s too late to do anything but declare bankruptcy. Some clear indicators that you might need to call a bankruptcy lawyer in the future include:
- On overdue invoices, you just make the minimum monthly payment.
- Your credit cards are maxed out, and your debt is increasing rather than decreasing month after month.
- You use credit cards to pay for day-to-day costs such as food, rent, and utilities.
- Every month, you pay overdraft fees.
- Collection companies are ringing your home at all hours of the day and night.
- Creditors are suing you or threatening to sue you because you have not paid your debts.
- You are ineligible for debt-relief services such as debt management or debt consolidation loans.
- A job loss, divorce, or medical setback throws your finances into disarray.
What is a Debt Repayment Scheme (DRS)?
The Debt Repayment Scheme is one of the numerous alternatives to bankruptcy in Singapore, consisting of a debt repayment plan overseen by the Court’s designated Official Assignee (OA). In contrast to bankruptcy, the Official Assignee in the event of DRS does not take over the title to the debtor’s property and does not liquidate it to pay creditors. Under the DRS, the OA performs debtor eligibility assessments, as well as supervisory and regulating activities, payment monitoring, and compliance with other legal obligations.
How can a Lawyer Help with the Process of DRS?
A lawyer can help you in several ways throughout the DRS process.
- Assist you in adhering to the plan’s and payment schedule’s terms.
- Submit the relevant legal paperwork and cooperate with the OA.
- Notify the OA of any changes in personal circumstances that may impact your capacity to repay the obligation.
- Inform the OA of your current address and contact information.
- Assist you with attending OA and creditor meetings.
- Assist you in complying with any other legal obligations imposed on debtors under DRS.