In Part I of our blog post, Victor Goh, our Restructuring and Recovery Partner touched on changes for institutional creditors and what to look out for when appointing a private trustee, as part of the Bankruptcy (Amendment) Act. In Part II of this blog post, he further discusses the role of a private trustee as part of the differentiated discharge framework.
A REHABILITATIVE REGIME & THE ROLE OF A PRIVATE TRUSTEE
The Bankruptcy (Amendment) Act 2015 also aims to create a more rehabilitative regime for bankrupts by introducing the differentiated discharge framework. This will enable bankrupts to be discharged within clear time frames, where justifiable. Taking a closer look at the administration process of the differentiated discharge framework:
- The institutional creditor successfully bankrupts a person and a private trustee is appointed.
- The bankrupt will submit his or her Statement of Affairs online and provide any supplementary information required.
- The private trustee will determine the bankrupt's target contribution and the bankrupt will start paying his or her monthly contributions.
- At the same time, the bankrupt will surrender all unencumbered assets for them to be sold and proceeds will go into his or her bankruptcy estate for the benefit of the creditors. He or she will also not be allowed to travel overseas or stay outside Singapore without the prior approval from the private trustee.
- The bankrupt has to comply with all instructions/directions given by the private trustee and perform all the duties and responsibilities expected of a bankrupt. Non-compliance may result in penalties or prosecution.
- The bankrupt's monthly contributions must be paid promptly for the duration of the bankruptcy.
- If the monthly contributions add up to the target contribution at various points of review, the bankrupt will be eligible for a discharge.
Enclosed is an infographic provided by the Ministry of Law:
For more information on the key reforms in the Bankruptcy (Amendment) Act, please contact Baker Tilly TFW's Restructuring and Recovery division through phone (+65 6336 2828) or email.