BANKRUPTCY DUE TO CREDIT CARD DEBTS

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BANKRUPTCY DUE TO CREDIT CARD DEBTS: The following Question stood in the name of Mdm Halimah Yacob –

4. To ask the Minister for Law in 2009 (i) what number of bankruptcy cases were due to credit card debts; (b) what percentage does this constitute in relation to the total number of bankruptcy cases; and (c) what are the profiles of these credit card debtors with respect to age, gender and income level.

Dr Lam Pin Min: Question No. 4, Sir.

Assoc. Prof. Ho Peng Kee: Sir, the Insolvency & Public Trustee’s Office (IPTO) collects the statistics on bankruptcies that are due to use of excessive credit, the causes of which may include not only credit card debts but also bank overdrafts and hire-purchase spending. These are based on declarations made by bankrupts in their Statements of Affairs.

Sir, last year, there were 2,058 bankrupts, of which 1,845 cases have filed their Statements of Affairs. Amongst these, 852 or about 46% declared that their insolvency arose from excessive use of credit.

By gender, about 80% were male and 20% were female. By age group, 12.9% were between 21 and 30 years old, 38.2% were between 31 and 40 years old, 33.1% were between 40 and 50 years old, while the remaining 15.8% were above 51 years old.

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In terms of the breakdown by income, 18.7% earned no income, 20.4% earned $1,000 or less, 39.9% earned between $1,000 and $2,000, 13.3% earned between $2,000 and $3,000, while the remaining 7.7% earned more than $3,000.