Mar 24, 2010
DEFAULTING EX-SPOUSES
Bankruptcy is not an excuse
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WE REFER to last Thursday's letter, 'Defaulting ex-spouses: Plug bankruptcy loophole', by Ms Jennifer Lee.
A person can be made a bankrupt only if the court is satisfied that his debts exceed his assets and if there is a valid bankruptcy petition.
Once the court orders a person to be made a bankrupt, his income and assets will have to be used to pay his creditors. If he owes maintenance payments to his ex-wife, then she will be treated as a creditor, together with his other creditors. If he defaults on maintenance payments after he becomes a bankrupt, the ex-wife can claim as a debtor, in the bankruptcy.
Thus, it is inaccurate to suggest that a bankrupt can 'avoid' making maintenance payments to his ex-wife, after becoming a bankrupt. In cases where the bankrupt ex-husband has few or no assets, his ex-wife, like other creditors, may get very little. That is, however, a consequence of the state of the ex-husband's finances.
Even if the bankrupt ex-husband has no assets, but has an income, a part of his income will have to be used to pay his creditors, including maintenance payments to his ex-wife.
It is also incorrect to say that ex-husbands who have filed for bankruptcy can continue to maintain their pre-bankruptcy lifestyles with little or no change. Bankrupts have to seek the permission of the Official Assignee (OA) to manage a business and to travel out of Singapore. They also have to fully disclose their assets and liabilities and submit regular reports on their income and expenditure. The OA will prosecute bankrupts who are found to have made a false declaration or managed a business without permission.
Derrick Thio
Corporate Communications Officer (Insolvency and Public Trustee's Office)
For The Official Assignee
DEFAULTING EX-SPOUSES
Bankruptcy is not an excuse
<!-- by line --><!-- end by line -->
<!-- end left side bar --><!-- story content : start -->
WE REFER to last Thursday's letter, 'Defaulting ex-spouses: Plug bankruptcy loophole', by Ms Jennifer Lee.
A person can be made a bankrupt only if the court is satisfied that his debts exceed his assets and if there is a valid bankruptcy petition.
Once the court orders a person to be made a bankrupt, his income and assets will have to be used to pay his creditors. If he owes maintenance payments to his ex-wife, then she will be treated as a creditor, together with his other creditors. If he defaults on maintenance payments after he becomes a bankrupt, the ex-wife can claim as a debtor, in the bankruptcy.
Thus, it is inaccurate to suggest that a bankrupt can 'avoid' making maintenance payments to his ex-wife, after becoming a bankrupt. In cases where the bankrupt ex-husband has few or no assets, his ex-wife, like other creditors, may get very little. That is, however, a consequence of the state of the ex-husband's finances.
Even if the bankrupt ex-husband has no assets, but has an income, a part of his income will have to be used to pay his creditors, including maintenance payments to his ex-wife.
It is also incorrect to say that ex-husbands who have filed for bankruptcy can continue to maintain their pre-bankruptcy lifestyles with little or no change. Bankrupts have to seek the permission of the Official Assignee (OA) to manage a business and to travel out of Singapore. They also have to fully disclose their assets and liabilities and submit regular reports on their income and expenditure. The OA will prosecute bankrupts who are found to have made a false declaration or managed a business without permission.
Derrick Thio
Corporate Communications Officer (Insolvency and Public Trustee's Office)
For The Official Assignee
