Note: The following is not offered as legal advice and should not be considered as an alternative to legal counsel.
Bankruptcy is often considered the last resort in trying to eliminate debt. No matter the situation, bankruptcy is a highly personal decision that can have both good and bad consequences. For some people, it can be an unfortunate but a very necessary choice.
Bankruptcy may indeed be a valid option for you if you are nearing the end of your working life, have more than four dependents, have an extremely large unsecured debt load, and a small savings level. Depending on your situation, however, these factors might not automatically necessitate bankruptcy. Do speak to a qualified lawyer to find out more.
There are many misconceptions and misinterpretations by the less-informed and/or the inexperienced with regard to bankruptcy in Singapore.
Bankruptcy in Singapore: Important Details to Understand
Once bankruptcy in Singapore is initiated, your assets (with some exemptions) are liquidated and the proceeds are used to pay your creditors. Certain creditors have precedence over others and this is outlined in the Bankruptcy Act. Generally, it has the quickest effect and is often the simplest to understand. However, it is not a panacea as it does not alleviate child support, court fines or current taxes.
Under the Bankruptcy Act of Singapore, full and frank disclosure of your personal financial information is necessary. Some examples of information that must be declared are your income, assets, and liabilities. You will also be required to seek permission from the Official Assignee before leaving the country.
An important fact to note is that you will have ruined your credit rating as bankruptcy stays on your credit and court records for as long as 7 years in Singapore. Obviously, this may have dire effects on your future applications for credit. It could also haunt you for a large part of your life especially if bankruptcy procedures were not handled properly. This can include having past creditors coming forward to claim their debts after you have been discharged.