What Happens After You’re Declared Bankrupt in Singapore?

Mark Cheng
Aug 24, 2025
4 min read

Facing the prospects of declaring bankrupt in Singapore can feel overwhelming — but it’s not the end of the road. Whether you're facing mounting debts or have just received a bankruptcy order from the court, understanding what happens next is crucial.

Bankruptcy is a legal process that affects not just your finances, but your ability to travel, own property, and even run a business. If you're already bankrupt or concerned you might be soon, this guide breaks down what you need to know — and what steps to take to move forward.

What Is Bankruptcy in Singapore?

In Singapore, an individual can be declared bankrupt when they owe at least $15,000 and are unable to repay the debt. The process is initiated either by the creditor (through a bankruptcy application) or by the debtor themselves (through a voluntary bankruptcy application).

Once you are declared bankrupt, a Private Trustee in Bankruptcy (PTIB) takes control of your assets and financial affairs. PTIBs can be solicitors, public accountants, or chartered accountants.

What Immediately Happens After You're Declared Bankrupt?

Your Assets Are Vested with the PTIB

Most of your assets, including property, bank accounts, and investments, will be managed by the PTIB. Some exceptions apply — for example, your CPF savings and HDB flat (under certain conditions) are generally protected.
Your Name Goes on the Bankruptcy Register

Your name will be listed in the public register of bankrupts, which can affect your reputation, job prospects, and ability to secure future credit.
Monthly Contribution

The PTIB will assess your financial situation, determine your monthly contribution, and monitor your progress toward eventual discharge. The PTIB will also determine your target contribution, which is the amount you need to pay to be considered for discharge.
You Face Certain Restrictions

As a bankrupt, you:
- Cannot travel overseas without the Official Assignee’s permission
- Cannot act as a director of a company
- Cannot take loans above $1,000 without declaring your bankruptcy status
- Must make mandatory monthly contributions based on your income

Can You Still Work or Earn Money While Bankrupt?

Yes, you are still allowed to work and earn a salary. In fact, you are expected to remain employed and make regular monthly contributions to help repay your debts. The PTIB will assess your income and expenses to determine a reasonable amount you should contribute.

Failing to contribute or cooperate with the PTIB can delay your discharge from bankruptcy.

What Happens to Your Debts?

Once you're declared bankrupt, all unsecured debts (such as credit card bills, personal loans, or unsecured overdrafts) are stopped, and creditors must deal directly with the PTIB. You’re no longer legally required to deal with them yourself.

However, secured debts, like mortgage loans, are treated differently. Your secured creditor (e.g. a bank holding your home loan) can still repossess or sell the secured asset to recover their debt.

How Long Does Bankruptcy Last?

There is no fixed duration, but a first-time bankrupt who complies with all conditions — including making monthly contributions and cooperating with the PTIB — can generally be discharged in:

3 to 5 years with a Certificate of Discharge
Longer if there is non-compliance, no effort to pay, or disputes

The Official Assignee (OA) has the power to issue a discharge for cooperative bankrupts who settle a target contribution amount or demonstrate reasonable effort.

What Is a Discharge from Bankruptcy?

A discharge means you are legally no longer bankrupt. This can happen in one of three ways:

By the Official Assignee – If you fulfil all conditions, the OA may grant a discharge
By the High Court – You may apply to the court for a discharge (subject to objections)
By Full Repayment – If you pay off all debts and costs, you can apply for an annulment

Upon discharge, your financial rights and freedoms are restored — including travel, borrowing, and running a business.

Can You Keep Your HDB Flat If You’re Bankrupt?

In many cases, yes — but it depends on:

Whether the flat is jointly owned
Whether there is an outstanding loan
Whether you used your CPF to pay for it

The OA typically does not force the sale of an HDB flat that is the bankrupt’s matrimonial home and/or fully paid up, but each case depends on its facts.

If you own private property, however, it is possible that the property will be sold to repay your creditors.

What About Joint Bank Accounts or Insurance Policies?

Joint bank accounts may be frozen or closed.
Insurance policies with cash value may be surrendered and used to pay off debts.
Any assets held in trust or in your children's names may also be investigated if there’s suspicion of asset shielding.

Should You Avoid Bankruptcy by Taking a Debt Repayment Scheme (DRS)?

If your total unsecured debts are under $150,000, you may qualify for the Debt Repayment Scheme (DRS) — an alternative that allows you to repay your debts over time without being declared bankrupt.

The DRS is administered by the OA and avoids the stigma and restrictions of bankruptcy. However, you must:

Be gainfully employed
Not have been bankrupt or in a DRS within the past 5 years

Your lawyer can advise you whether this is a viable option before the bankruptcy proceedings go ahead.

Why You Should Speak to a Lawyer Early

Bankruptcy affects more than your credit score — it impacts your family, assets, and future plans. If you’re considering bankruptcy, or have just been served with a statutory demand or court order, it’s critical to get legal advice immediately.

A lawyer can help you:

Understand your legal rights and obligations
Communicate with the Official Assignee
Assess alternatives such as the DRS
Protect your assets where possible
Apply for discharge when eligible

Common Situations We Assist With

You may need advice if:

You’ve just received a statutory demand or bankruptcy application
You want to avoid bankruptcy through negotiation or DRS
You need help navigating bankruptcy restrictions
You’re considering whether to voluntarily declare bankruptcy
You're unsure how bankruptcy will affect your home, business, or family assets

Need Advice on Bankruptcy or Debt Matters in Singapore?

We regularly advise individuals facing bankruptcy or financial distress. Whether you’re at risk of being declared bankrupt or want to explore options for discharge, we can help you understand your rights, responsibilities, and next steps — clearly and confidentially.