Bankrupts Sent for Debt Restructuring Schemes and Discharged

Mrs Lina Chiam asked the Minister for Law for the past two years, what is the number of bankrupts who are sent for debt restructuring schemes and the number who is discharged from bankruptcy.

The Senior Parliamentary Secretary to the Minister for Law (Ms Sim Ann) (for the Minister for Law): Mrs Chiam asks for the number of bankrupts who are sent for "debt restructuring schemes". I take it that Mrs Chiam is referring to the Debt Repayment Scheme (DRS) under Part 5A of the Bankruptcy Act. The DRS was introduced in 2009 to allow debtors with regular incomes and debts not exceeding $100,000, an opportunity to avoid bankruptcy by paying off all or some of their debts through a repayment plan. In 2010 and 2011, 274 debtors in total were placed on the DRS. Of these, seven have completed the scheme while 29 fell out of the scheme as they did not adhere to the repayment plan. The remaining 238 are still on the scheme. Sir, Mrs Chiam also asks for the number of bankrupts who were discharged from bankruptcy in the past two years. In 2010, 2,252 bankrupts were discharged from bankruptcy. In 2011, the number was 1,391.

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Mrs Lina Chiam (Non-Constituency Member): I thank the Senior Parliamentary Secretary for answering the question. I would like to ask a supplementary question. What qualifies a person to go under the debt restructuring scheme?

Ms Sim Ann: Sir, the criteria for the courts referring a case to DRS are set out in sections 65(7) and 67(3) of the Bankruptcy Act. They are as follows: first, the total debt involved in a bankruptcy application does not exceed $100,000; second, the debtor is not an undischarged bankrupt and has not been a bankrupt in the last five years; third, there is no voluntary arrangement in respect of the debtor, either now or within the last five years; fourth, the bankrupt is not already in the DRS and has not been in the DRS in the last five years; and, lastly, the debtor is not a sole proprietor or partner of a firm, or a partner in a limited liability partnership. Upon referral to DRS, the Official Assignee will make a more detailed assessment on whether the referred debtor is suitable, and factors considered include whether there are any other debts owed by the debtor, whether the debtor earns a regular income and whether the debtor can propose a viable repayment plan.