WHAT IS BANKRUPTCY?
- It is a legal proceeding initiated when a person or business is unable to repay outstanding debts or obligations. There are two (2) types of bankruptcy:
A debtor who is unable to pay his/her debts can apply for a Receiving Order (RO) to be made against them by filing a Debtor's Petition at the High Court.
This is an application made by the creditor by filing a Creditor's Petition at the High Court where the debt owed by the debtor to the petitioning creditor amounts to $10,000 and above.
WHAT HAPPENS WHEN I AM UNDER A RECEIVING ORDER (RO)?
- Your financial affairs will be managed and monitored by the Official Receiver. Effective from the date of Receiving Order, creditors can only recover debts by filing a proof of debts in the bankruptcy matter.
DOES BANKRUPTCY AFFECT MY FAMILY MEMBERS?
WILL BANKRUPTCY AFFECT MY EMPLOYMENT?
- It may. Your bankruptcy status might prevent you from getting or keeping employment in certain occupations. Your employer is not usually notified of your bankruptcy status unless circumstances require him to be so notified.
WHAT HAPPENS TO SOMEONE WHO GUARANTEED MY DEBT?
- He or she will be liable for the total amount outstanding on all debts incurred in your name.
WHEN DO CREDITORS GET PAID?
- Once the amount collected in the Official Receiver’s account is sufficient to pay the creditors, the Official Receiver will declare either interim or final payment of composition and/or dividend to creditors.
ARE THERE ANY 0FFENCES UNDER THE BANKRUPTCY LAW?
- Yes. This is provided under Part VIII of the Bankruptcy Act, Cap 67. The most important are summarized below:
- Disposing of the property before bankruptcy with the intention to defeat your creditor’s claims.ØFailure to disclose assets.
- Deliberately obtaining credit when you know you cannot pay.
- Gambling and speculation which results in Bankruptcy.
- Incurring debts during bankruptcy for over $100 without disclosing that you are bankrupt.
- Operating a business under an assumed name without disclosing your real name and your bankruptcy status.
