Discharge Of Bankruptcy Part II

How can a bankrupt be released from his bankruptcy status?
There are 3 ways in which a bankrupt can be released from his bankruptcy status:

1. Discharge by court order
   A bankrupt must first apply from the DGI a certificate to specify the number of creditors. Then, the Registrar shall not less than 28 days before the day appointed for hearing the application give notice of time and place of the hearing to the DGI, advertise notice in Gazette and send a copy of such notice to each creditor.At the hearing, the court may consider the following factors:
   -age of the bankrupt (Re Siow Ah Moi case)
   -conduct of the bankrupt
   -the extent of the debt settled
   -public interest
   -the DGI’s report on the Bankrupt’s conduct and affairs
   -whether the Creditors oppose ( Ng Kok Wah case)
   -equity, fairness and good conscience

   Then, the court may make the following orders:

-grant/refuse an absolute order for discharge
-suspend the operation of the order for a specific time
-suspend the operation of the order until a dividend of 50% has been paid
-grant an order of discharge subject to certain conditions

2. Discharge by applying to DGI for the certificate of discharge
   Instead of applying to the court, a bankrupt may after 5 years from the date of the Bankruptcy Order, apply to the DGI to issue a certificate to discharge the Bankrupt from bankruptcy. As there are no formal rules, the Bankrupt may apply informally, even orally to the DGI.A creditor who intends to object may within 21 days from the date of service of the notice, give notice of his objection stating the grounds. If a creditor does not raise any objection, then it is deemed that there is no objection to the discharge.

   No objection shall be made against:
   -a bankrupt who was adjudged bankrupt by reason of him being a social guarantor
   -a bankrupt who is registered as a person with disability
   -a deceased bankrupt
   -a bankrupt suffering from serious illness certified by a Government Medical Officer

3. Automatic Discharge
   A bankrupt shall be discharged from bankruptcy on the expiration of 3 years from the date of the submission of the statement of affairs if:
   -the bankrupt has achieved the amount of target contribution of his provable debts
   -the bankrupt has complied with the requirement to render an account of money and property to the DGIThe DGI shall serve a notice of the discharge to each of the creditors. If a creditor who wishes to object, shall within 21 days from the date the notice was served on him, apply to the court for an order to suspend the discharge on the grounds stipulated.
   A creditor who fails to object is deemed to have no objection to the discharge.

Effect of Discharge

Provided under s35 Insolvency Act 1967, all debts which are provable in bankruptcy are discharge except for debts which:
-due to the government (eg. income tax)
-incurred by fraud or CBT (criminal breach of trust)
-any liability in respect of a fine imposed for an offence