INV - Bankruptcy
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Questions and Answers

Which section of the IRDA allows a debtor to make a bankruptcy application?

  • Section 307
  • Section 308 (correct)
  • Section 310
  • Section 312

What is one of the duties of a bankrupt as stated in the IRDA?

  • To manage creditors' expectations
  • To maintain all assets indefinitely
  • To repay all debts immediately
  • To file a Statement of Affairs (correct)

Which section of the IRDA discusses the presumption of inability to pay debts?

  • Section 312 (correct)
  • Section 310
  • Section 392
  • Section 400

What limitation does Section 401 of the IRDA place on bankrupt individuals?

<p>They cannot leave the country (C)</p> Signup and view all the answers

Which procedure is outlined in Section 3.1 of the IRDA regarding bankruptcy?

<p>Expedited Procedure (D)</p> Signup and view all the answers

What is the prescribed limit for a Debt Repayment Scheme as stated in the IRDA?

<p>$15,000 (A)</p> Signup and view all the answers

Which section provides the court with the power to annul a bankruptcy order?

<p>Section 392 (C)</p> Signup and view all the answers

What role does an Official Assignee play in bankruptcy administration according to the IRDA?

<p>Is mandatory as per the regulation (B)</p> Signup and view all the answers

What restriction may apply to a bankrupt individual regarding corporate roles?

<p>They cannot be a director of a company (C)</p> Signup and view all the answers

What is a key factor for the court's jurisdiction to consider a debtor's application for bankruptcy?

<p>The debtor's permanent residence (C)</p> Signup and view all the answers

Which of the following best describes a statutory demand as per the IRDA?

<p>A formal request for payment of debts (B)</p> Signup and view all the answers

In terms of bankruptcy administration, who is required to supervise the proceedings?

<p>A private trustee in bankruptcy (D)</p> Signup and view all the answers

Which provision outlines the duties of the bankrupt to submit their accounts as directed?

<p>Section 333 of the IRDA (B)</p> Signup and view all the answers

Which of the following sections defines the disqualifications faced by a bankrupt?

<p>Section 400 of the IRDA (B)</p> Signup and view all the answers

What major outcome can occur from an annulment of bankruptcy as per Section 392?

<p>Termination of the bankruptcy order (A)</p> Signup and view all the answers

What is the common presumption regarding a debtor's ability to pay debts as outlined in the IRDA?

<p>A failure to pay creates a presumption of inability (C)</p> Signup and view all the answers

Which of the following statements about the Debt Repayment Scheme is correct?

<p>There is a prescribed limit for participation (A)</p> Signup and view all the answers

What restriction prevents a bankrupt individual from leaving Singapore?

<p>Bankruptcy terms imposed by IRDA (B)</p> Signup and view all the answers

Which of the following is NOT a ground for a bankruptcy application under the IRDA?

<p>Total assets under $15,000 (C)</p> Signup and view all the answers

What entity is primarily responsible for administering bankruptcy estates as of November 1, 2023?

<p>Private Trustee (C)</p> Signup and view all the answers

Which factor is NOT considered when determining a trustee's remuneration under Rule 47 of the Personal Insolvency Rules?

<p>Violation of bankruptcy laws (D)</p> Signup and view all the answers

Which statement accurately reflects the distribution of the bankrupt's property after the bankruptcy order is made?

<p>The bankrupt's property vests in the private trustees or official assignee. (B)</p> Signup and view all the answers

Under which circumstance can an official assignee be appointed as the trustee in bankruptcy?

<p>When the official assignee considers public interest and consents. (A)</p> Signup and view all the answers

Which section of the law explicitly discusses the appointment criteria for a private trustee in bankruptcy?

<p>Section 36 (A)</p> Signup and view all the answers

What happens if a debtor fails to comply with a statutory demand within 21 days?

<p>A presumption of inability to pay debts arises. (A)</p> Signup and view all the answers

Under which conditions can a creditor file a bankruptcy application before the expiration of the 21-day statutory demand period?

<p>There is a serious risk of property value diminishing. (B)</p> Signup and view all the answers

What is the administration date of bankruptcy defined as?

<p>The date of the debtor's statement submission. (B)</p> Signup and view all the answers

What effect does a bankruptcy order have on the debtor's property?

<p>Property vests in the official assignee. (D)</p> Signup and view all the answers

What must a creditor do to prove a debt in bankruptcy?

<p>File proof of a debt within four months after the administration date. (C)</p> Signup and view all the answers

What is required from the creditor for an expedited bankruptcy application under Section 314?

<p>A statement indicating property diminution risk. (A)</p> Signup and view all the answers

According to Section 311, what ground for bankruptcy applies when the debt is incurred outside Singapore?

<p>The debt must be enforceable under Singapore law. (C)</p> Signup and view all the answers

What is one duty of a bankrupt individual?

<p>To submit supplementary information as directed. (D)</p> Signup and view all the answers

What happens to a bankruptcy order once it is made?

<p>It continues until the debtor is discharged. (C)</p> Signup and view all the answers

Who can initiate a bankruptcy application?

<p>Either creditors or debtors can initiate the application. (B)</p> Signup and view all the answers

What is one of the specific criteria for a bankruptcy application to be valid under Section 311?

<p>The total amount of debt must not be less than $15,000. (C)</p> Signup and view all the answers

Which of the following does NOT constitute basis for court jurisdiction over a debtor in Singapore?

<p>The debtor's nationality is Singaporean. (D)</p> Signup and view all the answers

How can a bankruptcy order be annulled according to the relevant legislation?

<p>Through repayment of all debts or court ordering. (C)</p> Signup and view all the answers

Which alternative to bankruptcy allows debtors to negotiate payment terms without filing for bankruptcy?

<p>Individual Voluntary Arrangement (IVA). (B)</p> Signup and view all the answers

In which situation would a bankruptcy application be considered if the debtor's total debts were $14,000?

<p>The debtor would not qualify as the debts are under the minimum threshold. (A)</p> Signup and view all the answers

What does Section 310 subsection 1 of the relevant legislation establish?

<p>The criteria for the court’s jurisdiction over a debtor. (B)</p> Signup and view all the answers

What is required for a bankrupt to maintain an action according to the Bankruptcy Act?

<p>The bankrupt must obtain prior sanction from the Official Assignee. (D)</p> Signup and view all the answers

What statutory duty must a bankrupt fulfill concerning property identification?

<p>Assist the Official Assignee in identifying and recovering property of the estate. (D)</p> Signup and view all the answers

Under which circumstances can a bankrupt individual be a director of a company?

<p>A bankrupt can never be a director of a company. (C)</p> Signup and view all the answers

Which section describes the prohibition against undischarged bankrupts entering into an Individual Voluntary Arrangement?

<p>Section 275 (B)</p> Signup and view all the answers

What is required from a nominee appointed by the debtor for a voluntary arrangement?

<p>The nominee must be qualified and willing to act. (A)</p> Signup and view all the answers

How much credit can a bankrupt incur without informing the lender of their status?

<p>$1000 (A)</p> Signup and view all the answers

What requires an official application to the court to enter into an Individual Voluntary Arrangement?

<p>Proposing a voluntary arrangement. (D)</p> Signup and view all the answers

Which action is prohibited for a bankrupt without the permission of the Official Assignee?

<p>Traveling outside of Singapore. (A)</p> Signup and view all the answers

What requirement must be satisfied for the court to grant an interim order for a voluntary arrangement?

<p>The nominee must be qualified and willing to act. (C)</p> Signup and view all the answers

What is the maximum duration of an interim order before it may require an extension?

<p>42 days (D)</p> Signup and view all the answers

Who is eligible to be appointed as a nominee under the regulations?

<p>A licensed insolvency practitioner (B)</p> Signup and view all the answers

If a debtor’s proposal is rejected during the creditor's meeting, what happens to the interim order?

<p>It will be discharged (A)</p> Signup and view all the answers

What does a debtor need to provide to the nominee as part of the voluntary arrangement proposal?

<p>A statement of assets, liabilities, and affairs (D)</p> Signup and view all the answers

What is the total liability limit for a debtor to qualify for the Debt Repayment Scheme?

<p>$150,000 (C)</p> Signup and view all the answers

During the implementation of a Debt Repayment Scheme, what is the effect of the moratorium on secured creditors?

<p>Their right to deal with security is unaffected (B)</p> Signup and view all the answers

What condition must be met regarding a debtor's status prior to applying for DRS?

<p>The debtor must not be bankrupt or under any voluntary arrangement within the last five years (A)</p> Signup and view all the answers

What will happen if the official assignee finds a debtor unsuitable for the Debt Repayment Scheme?

<p>The creditor can proceed with a bankruptcy application (D)</p> Signup and view all the answers

What document is issued to the debtor upon successful repayment according to the Debt Repayment Plan?

<p>A certificate of completion (D)</p> Signup and view all the answers

Flashcards

Bankruptcy Application (Creditor)

A legal process initiated by a creditor when they believe a debtor is unable to repay debts, as outlined in Section 307 of the IRDA.

Bankruptcy Application (Debtor)

A self-initiated process by a debtor who believes they can't repay debts, found in Section 308 of the IRDA.

Bankruptcy Jurisdiction

The court's authority to hear a bankruptcy case, assessed according to the debtor's location and the claims, as per Section 310(1) of the IRDA.

Grounds for Bankruptcy (Minimum Debt)

The criteria for initiating bankruptcy proceedings, typically a debt exceeding a specific amount (e.g., $15,000), as described in the IRDA.

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Presumption of Inability to Pay

A legal assumption that a debtor cannot repay debts, under Section 312 of the IRDA.

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Statutory Demand

A formal notice given to a debtor by a creditor, asserting the debt, as per Section 312(a) of the IRDA.

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Private Trustee in Bankruptcy (PBIT)

A mandatory figure in bankruptcy proceedings, taking over the bankrupt's assets, as per rules of the IRDA.

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Restrictions on Bankrupt

Limitations imposed on a bankrupt individual, typically involving restrictions on leaving Singapore or acting as a company director, as defined in sections of the IRDA.

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Annulment of Bankruptcy

The cancellation of a bankruptcy order, governed by Sections 392-395 of the IRDA.

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Debt Repayment Scheme

An alternative to bankruptcy, allowing debtors to repay debts according to a plan laid out by the IRDA, subject to Section 289(2)(a) and Regulation 4 of relevant regulations.

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Who can file for bankruptcy?

Either a creditor or a debtor can initiate bankruptcy proceedings. Creditors use Section 307 of the IRDA, while debtors use Section 308.

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Minimum Debt for Bankruptcy

There's a minimum debt threshold (usually $15,000) that must be met before a bankruptcy application can be filed.

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What's a 'statutory demand'?

A formal written notice from a creditor to a debtor demanding payment of a debt. If the debtor doesn't pay within the required time, it can lead to bankruptcy proceedings.

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What is a Presumption of Inability to Pay?

A legal situation where the court assumes a debtor can't pay their debts based on certain evidence, like failure to respond to a statutory demand.

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Effect of Bankruptcy Order

The bankruptcy order legally declares the debtor bankrupt. This triggers various consequences, including asset management by an Official Assignee or Private Trustee in Bankruptcy.

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Alternatives to Bankruptcy

There are options besides bankruptcy, like the Debt Repayment Scheme, which allows debtors to repay debts under a structured plan.

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Individual Voluntary Arrangement (IVA)

A legal agreement between a debtor and their creditors that outlines a plan for repaying debts. It is a way to avoid bankruptcy for large businesses.

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Who manages bankrupt's assets?

The Official Assignee (OA) or a Private Trustee in Bankruptcy (PBIT) is mandatory after a bankruptcy order, responsible for managing and distributing the bankrupt's assets.

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Bankrupt's Duties

Bankrupts have several required actions, such as providing a Statement of Affairs and submitting accounts to the OA/PBIT as directed.

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Bankruptcy Application

A legal process to declare a person or business unable to pay their debts, initiated by either a creditor or the debtor themselves.

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Jurisdiction in Bankruptcy

Whether a Singapore court can handle a bankruptcy case. This depends on the debtor's connection to Singapore, like residency or having assets there.

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Bankruptcy Grounds (Debt Amount)

A bankruptcy application requires a minimum total debt amount, typically $15,000 or more, for the case to proceed.

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Bankruptcy Administration

The process of managing a bankrupt's affairs, usually by an official assignee or private trustee.

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Discharged Bankruptcy

When a bankruptcy order is lifted, usually because the debtor paid back their debts or a court approves it.

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Relevant Laws

In Singapore, the Insolvency Restructuring and Dissolution Act 2018 (IRDA) and related rules govern bankruptcy.

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Bankrupt's Duty to Assist

A bankrupt person is obligated to help the official assignee locate and recover assets belonging to their estate.

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Bankruptcy Restrictions

A bankrupt individual faces limitations on their activities, such as being unable to leave Singapore without permission or incur significant debt without disclosing their status.

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Requirements for IVA Approval

The court requires specific conditions to approve an IVA, such as a qualified nominee and a viable debt repayment plan.

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Bankrupt's Statement of Affairs

A document that a bankrupt person must file, outlining their financial situation and assets.

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Bankruptcy Order's Impact

A bankruptcy order restricts the bankrupt's ability to manage finances and assets, which are now transferred to an official assignee or trustee.

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Bankrupt's Duty to File Accounts

A bankrupt person must submit their financial records regularly as directed by the official assignee.

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The Official Assignee's Role

The official assignee acts as a representative for the bankrupt's creditors, overseeing assets and managing the bankruptcy process.

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Statutory Restrictions on Bankrupts

The Bankruptcy Act sets limitations on a bankrupt's behavior, including restrictions on leaving Singapore without permission and incurring significant debt.

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Statutory Demand (SD)

A formal written notice a creditor sends to a debtor demanding payment of a debt within 21 days. Failure to pay can lead to a presumption of inability to pay and potentially bankruptcy.

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Expedited Bankruptcy Application

A creditor can apply for bankruptcy before the 21-day SD deadline if there's a serious risk of the debtor's assets being significantly diminished.

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Bankruptcy Order

A court ruling formally declaring a person or business bankrupt. This triggers the transfer of assets to the Official Assignee (OA).

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Official Assignee (OA)

A government appointed official responsible for managing the assets of a bankrupt person or company, distributing them among creditors.

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Proof of Debt

A document filed by a creditor within four months of the bankruptcy administration date, proving the amount of debt owed to them by the bankrupt.

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Bankruptcy Administration Date

The date the bankrupt submits their Statement of Affairs or supplementary information to the Official Assignee. This triggers the 4-month deadline for creditors to file their proof of debt.

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Bankruptcy Discharge

The final step in bankruptcy proceedings where the court releases the bankrupt from their debts, allowing them to rebuild their financial life.

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What are the four factors considered when determining a trustee's remuneration?

The complexity of the case, the exceptionally high level of responsibility assumed by the trustee, the effectiveness of the trustee's work, and the value and nature of the bankrupt's assets.

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What property belongs to the bankrupt's estate?

The estate includes all property owned by the bankrupt at the time of the bankruptcy order, as well as any property they acquire after becoming bankrupt but before their discharge.

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What assets are not divisible among creditors?

Assets like CPF funds and assets governed by the Housing Development Act are not distributed to creditors.

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Interim Order (IVA)

A temporary court order that prevents creditors from taking action against a debtor during the initial stages of a Voluntary Arrangement (IVA). It's valid for 42 days unless extended.

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Nominee (IVA)

A licensed insolvency practitioner appointed by the court to oversee the Voluntary Arrangement process. They ensure the debtor's proposal is fair and workable.

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Accreditor's Meeting (IVA)

A meeting convened by the nominee to discuss the debtor's proposed Voluntary Arrangement with creditors. It is a crucial step in the IVA process.

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Debt Repayment Scheme (DRS)

An alternative to bankruptcy, allowing debtors to repay their debts through a structured plan. It is available for debtors with limited liabilities.

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DRS Eligibility - Liabilities

A debtor's total liabilities cannot exceed $150,000 to qualify for a Debt Repayment Scheme (DRS).

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DRS Eligibility - Past Bankruptcy

A debtor must not have been bankrupt or under a Voluntary Arrangement within the past 5 years to be eligible for a Debt Repayment Scheme (DRS).

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DRS Eligibility - Sole Proprietor

The debtor cannot be a sole proprietor, a partner in a firm, or a partner in a limited liability partnership to be eligible for a Debt Repayment Scheme (DRS).

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Moratorium (DRS)

A temporary suspension of legal actions against a debtor during the implementation of a Debt Repayment Scheme (DRS).

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Certificate of Completion (DRS)

A document issued to the debtor upon successful completion of a Debt Repayment Scheme, indicating they have repaid their debts according to the plan.

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Study Notes

Bankruptcy Proceedings

  • Who can apply:
    • Creditor (Section 307 of the IRDA)
    • Debtor (Section 308 of the IRDA)
  • Conditions for Debtor:
    • Must be domiciled in Singapore.
    • Must have a place of residence of reasonable duration in Singapore.
    • Must have property in Singapore.
    • Can be involved with business in Singapore (carried on business, or an agent/manager).

Jurisdiction over Debtor

  • Section 310(1) of the IRDA:
    • No application can be made against an individual unless:
      • Domiciled in Singapore.
      • Property in Singapore.
      • Resident in Singapore (or in Singapore within 12 preceding the application).
      • Carried on business in Singapore.
      • Domicile of choice is more important than domicile of origin.

Grounds for Bankruptcy Application

  • Section 311 of the IRDA:
    • Debt of $15,000 or more.
    • Debt due and payable immediately.
    • Unable to pay debts.

Presumption of Inability to Pay Debts

  • Section 312 of the IRDA:
    • Debtor presumed unable to pay debt if a statutory demand is served and:
      • At least 21 days have passed since statutory demand was served.
      • Debtor did not comply or apply to the court for it to be set aside.
      • Debtor has left Singapore to obstruct creditors.
      • Debt repayment is deemed impossible.
      • Debtor has failed a debt repayment scheme.

Enforcement of Foreign Debt

  • 2 ways:
    • Commencing a new suit in Singapore.
    • Registering a foreign judgement.

Alternatives to Bankruptcy

  • Debt Repayment Scheme:
    • For debts under $150,000.

Individual Voluntary Arrangement (IVA)

  • Alternatives to bankruptcy.
  • Allows debtors to enter a binding arrangement with creditors.
  • Avoids bankruptcy proceedings.
  • Not available to undischarged bankrupts.
  • Court needs to approve the arrangement.

Application/Nominee as Supervisor

  • Mandatory:
  • Nominee needs to be a licensed insolvency practitioner.
  • Interim order for 42 days stay of proceedings.

Bankruptcy Administration & Duties of Bankrupt

  • Official Assignee (OA)/Private Trustee in Bankruptcy (PTIB):
    • Mandatory appointment.
    • OA/PTIB takes over bankrupt's property/affairs.
    • Bankrupt has duties to disclose, deliver and attend meetings.

Restrictions against Bankrupt

  • Disqualification:
    • Cannot be trustee or executor in respect to any trust.
    • Bankrupt cannot leave Singapore without permission.

Limits of Liability

  • Incurring Credit:
    • Cannot exceed $1,000 without disclosing bankruptcy.
  • Trade/Business:
    • Needs permission to engage in trade/business.

Annulment of Bankruptcy Order

  • Court's Power:
    • Annul if a reason for making it was invalid
    • Annul if debts are paid/secured.
  • Time Limit:
    • Within 12 months from issuing the order.
  • Official Assignee's Power:
    • If debts & fees are paid, bankruptcy can be annulled.

Discharge of Bankruptcy

  • Various factors: Including reason for bankruptcy, time in bankruptcy, conduct of bankrupt, cooperation.
  • Certain debts remain unpaid:
    • Debts due to government.

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Bankruptcy Proceedings PDF
Singapore Bankruptcy Law PDF

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