2 Aug 2016
SINGAPORE: Debt Threshold Raised in Overhaul of Bankruptcy Protocols
The minimum debt required for bankruptcy proceedings to be initiated against a Singapore-based company has been raised from S$10,000 (US$7,452) to S$15,000. This is the most prominent of the revisions to the country’s bankruptcy rules, all of which came into effect as of 1 August this year.
Among the other changes, creditors can now trigger debt recovery proceedings without having to wait for 21 days after the presentation of the initial payment notice. This will only be possible, though, if a likely deterioration of the value of the debtor’s assets over that period can be demonstrated.
In other moves, timeframes can now be specified for the discharge of bankrupt companies. Previously, insolvent companies could only be discharged by a court order or via a certificate of discharge issued by the Official Assignee (OA).
In a final change, it is now mandatory for institutional creditors to appoint private trustees to manage the assets of an insolvent company during the liquidation process. Previously, most bankruptcies in Singapore were administered by the OA.