Oral Answer by Senior Minister of State for Law, Mr Edwin Tong, to Parliamentary Question on Bankruptcy Trends
04 Feb 2020 Posted in Parliamentary speeches and responses
Mr Desmond Choo (Member of Parliament for Tampines GRC)
To ask the Minister for Law (a) over the last 10 years, what has been the trend of Singaporeans being declared bankrupt; (b) what is the average time taken to exit bankruptcy; and (c) what are the measures taken to ease difficulties in job search and employment because of bankruptcy.
The number of Singaporeans declared bankrupt each year has remained stable and averaged around 1,400 individuals between 2010 and 2018. In the same period, the average time taken for Singaporeans to exit bankruptcy is 9.7 years.
The Ministry of Law has introduced various enhancements to the bankruptcy regime to help individuals avoid bankruptcy and also reduce the time taken for bankrupts to exit bankruptcy.
The Debt Repayment Scheme for instance, or DRS, introduced in 2009, allows individuals with steady employment and whose unsecured debts do not exceed $100,000 to avoid bankruptcy by developing a repayment plan over a period of time with their creditors. With the upcoming implementation of the Insolvency, Restructuring and Dissolution Act, the cap will be raised from $100,000 to $150,000. This will allow more debtors to qualify for DRS, and avoid bankruptcy with the consequent risk of losing their jobs.
The Differentiated Discharge Framework, or DDF, which was introduced in 2016, provides a more rehabilitative regime, with clear goals and timelines for the insolvent individual to meet to be discharged at various points. Under this framework, first-time bankrupts will generally be able to achieve discharge within a shorter timeframe of between 5 to 7 years, if they cooperate by keeping to the conditions of bankruptcy and they also make the required contributions each time.
For cases which predate the DDF, the Insolvency Office has since 2014 stepped up efforts to actively review deserving bankruptcy cases for a timely discharge. Individual bankrupts who have made satisfactory contributions to their estate and who have been cooperative with the Insolvency Office during the administration of their bankruptcy are discharged expeditiously, so that they can have a fresh start in their financial affairs.
The Insolvency Office routinely advises Singaporean bankrupts who require assistance on employment on the available avenues for help. Such avenues include the Workforce Singapore (WSG) and NTUC’s Employment and Employability Institute (the e2i); and through the Adapt and Grow initiative, WSG and e2i offer employment facilitation services such as career coaching, employability workshops, job fairs and job matching. They also provide a suite of employment support programmes to help jobseekers, including bankrupts, take up new jobs and careers.
All employers in Singapore are expected to practise fair and merit-based employment practices, as laid out in the Tripartite Guidelines on Fair Employment Practices. Where there are specific requirements to ask for an applicant’s bankruptcy status at the point of application, employers should state the reasons, which must be job-related. This may be necessary for some jobs, for example, those in the financial industry, where employees are required to be free from any financial embarrassment.