Personal Insolvency

What is Personal Insolvency?

If you can no longer afford to repay your debt, you can enter into a personal insolvency agreement with your creditors. Only those who have been in debt for a long period of time are eligible for this choice. You agree to pay a certain sum over a set period of time under a personal insolvency arrangement (usually 3 to 5 years). You may usually settle your debts for less than what you owe, and the remaining sum will be legally wiped off.

Only unsecured debts, such as credit and store cards, unsecured personal loans and pay day loans, utility bills, overdrawn bank accounts, and overdue rent, as well as medical, legal, and accounting expenses, are covered by personal insolvency.

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Individual Voluntary Arrangement (IVA)

An eligible debtor can negotiate voluntary arrangements with his creditors to persuade them not to file for bankruptcy and to support debt settlement whenever possible. If the debtor wishes to propose a voluntary agreement to the creditor, he must first seek an interim order to halt all further proceedings against him. The application must be supported with a proposal detailing all of the debtor’s assets and liabilities, as well as how the debtor intends to repay the debts. The proposal must include a candidate who will be responsible for overseeing the voluntary arrangements’ execution. The nominee must be a licensed practitioner of insolvency.

The debt is deemed settled if the creditors approve of the proposed voluntary arrangement and the debtor fulfills his responsibilities under the voluntary arrangement. If the debtor does not adhere to the voluntary agreement, the nominee or any of the creditors may file a bankruptcy petition against the debtor.

Private Trustee(s) in Bankruptcy (PTIB)

Depending on your situation, the trustee may be the Official Assignee or a private trustee.

The trustee will do the following:

  • Manage your finances, for example, by selling assets and distributing the revenues to your creditors to help pay off your debts.
  • As a bankrupt, be sure to fulfill your obligations
  • Assess your earning potential and the amount you need to support yourself and your family, to determine your: 
    • Monthly contribution, which is the amount you should pay to the trustee every month.
    • Target contribution, which is the amount you need to pay to be considered for discharge (to get out of bankruptcy).

You must first submit a Statement of Affairs to the trustee, which details your assets (what you own) and liabilities (what you owe). You must also supply accurate information about your job, income, and dependents.

Contact us!

  • +65 6561 0398 (Anthony)
  • INSOLVENCY@e-management.com.sg