1. The debtor files in court a declaration of his/her inability to pay his/her debts, or presented a Bankruptcy Petition against himself/herself; or
2. A creditor who obtains a final judgement against the debtor, serves on the debtor a Bankruptcy Notice requiring him/her to pay the judgement debt or compound it. If the debtor does not do so within 21 days after service of the notice, he/she has committed an act of bankruptcy.

A debtor is presumed unable to his/her debts when one of the following occurs:

1. If he fails to comply with or set aside a Statutory Demand within 21 days of service; or
2. Execution (which means seizing of goods or money in the debtor's bank account) action taken against the debtor after a court gives a verdict against the debtor does not recover all the money returned wholly or partly unsatisfied; or
3. He absconds or remains outside Singapore with the intention of defeating, or delaying the recovery of debts by his creditors.

No. The debt owing to the creditor must amount to at least $10,000.00 and must be a sum of money payable immediately or at some certain future time.

Q: What if the debtor is a Malaysian citizen?

The debtor can be a non-citizen of Singaporean who is domiciled in Singapore, or within a year before the date of presentation of the Bankruptcy Petition, has stayed in Singapore or has property or business in Singapore, or though not in Singapore, carries on business through an agent in Singapore. (There is also a provision known as “Double Administration” where a person can be made bankrupt under the laws of Singapore and Malaysia. However, there is no other such “arrangement” with other countries yet.)

Q: How do I go about making someone bankrupt?

1. A Statutory Demand will be served on the debtor informing the debtor of the debt owned to the creditor. It is also stated on the Demand that the creditor has 21 days to comply with the Demand or set aside the demand.
2. The creditor may petition to Court after 21 days if the creditor has not attempted to comply or set aside the Demand. If the debtor himself is filing the Petition, it must state that the debtor cannot pay his debts.
3. The Court, in appropriate cases, will grant a Bankruptcy Order.
4. The Court will declare the debtor bankrupt if convinced that the debtor cannot pay his/her debts. The date of bankruptcy starts from the date the Petition is presented, not when the date the order was made.
5. The bankrupt must then submit to the Official Assignee a full Statement of his/her affairs, containing a list of his/her assets and liabilities.
6. A summary of the statements called the Observations will be provided to all creditors from the Official Assignee.
7. The bankrupt may undergo public examination and be questioned on his/her assets and on matters such as the manner he/she has managed his/her affairs and the reasons for his/her bankruptcy.
8. A meeting of creditors may be convened by the Official Assignee to give an opportunity to the creditors to question the bankrupt, especially on his/her Statement of Affairs.
9. The Official Assignee proceeds to realize the bankrupt's assets by selling the bankrupt's assets eg. car. The bankrupt must pay a portion of his/her working salary as monthly instalments into his/her Bankruptcy Estate Account maintained by the Official Assignee for the benefit of the bankrupt's creditors.
10. If the bankrupt offers a scheme of arrangement or composition, the Official Assignee will then convene a meeting with the bankrupt's creditors to decide whether they are willing to accept or reject the scheme or composition.
11. When all the bankrupt's property is realized, (subjected to certain priorities) payments called dividends are paid to the creditors whose proofs of debts have been admitted by the Official Assignee.
12. Where the bankrupt makes full payment of the debts admitted by the Official Assignee, or proposes a composition or scheme of arrangement which is accepted by the creditors, he/she may obtain a recision and an Annulment of the Bankruptcy Order.

Q: What is the effect of a Bankruptcy Order?

A Bankruptcy Order:

1. protects the debtor from any legal proceedings by creditors whose claims are provable in bankruptcy. However, it does not protect the debtor from payment of fines for breaches of the law eg. Road Traffic fines; and
2. takes away from the debtor's control over his/her property and vesting it in the Official Assignee for distribution among the creditors.

Failure to comply without reasonable excuse may lead to a warrant of arrest being issued against the bankrupt. In addition, failure to file the Statement of affairs constitutes contempt of Court and the bankrupt may be fined up to $10,000.00 or imprisoned up to 2 years or both.

Q: What am I suppose to do if everything is taken away?