The Consequences of Getting Bankrupt
Singapore is rich but bankruptcy still happens every now and then. We have to look after our resources if we do not want our assets liquidated and we are left without a house, car and possibly divorce. Bankruptcy refers to a situation when someone owes more money that he/she can actually pay.
How will we know if we are bankrupted? If we owe to a creditor at least $10,000 and if we have no way to repay the amount we borrowed, we are definitely on the road to bankruptcy. The humiliation others feel when they file for bankruptcy is a consequence. What else? Here are other consequences of getting bankrupt:
- Seizure of our assets: Like rabid dogs, creditors will seize and divide all our assets. They will pick anything of value that they can use to generate money. The good news is that creditors are not allowed to take necessities like house unless it has been refinanced.
- Statement of affairs: A bankrupt citizen can carry on with his/her life but with one condition: a portion of his/her income goes to creditors. Sure, life gets inconvenient when we are asked to provide or tally receipts. This is called statement of affairs.
- No overseas travel: There is a reason why bankrupts should never go abroad – creditors are afraid they won’t return. One should inform the court if he/she intends to go outside but apart from work-related reasons, the requests (to go abroad) are seldom approved. If a bankrupt went without approval, they can be jailed and fined.
- Compromised credit rating: If we file for bankruptcy, that moment gives us instant poor credit rating. If we are discharged, our rating will still remain poor. We have to know that it will take up to 7 years to rebuild our rating.
This hurdle will end only if the debtor only owes less than $100,000. The court may discharge after 3 years.