Latest information by the Ministry of Regulation reveals that there was an increase in the variety of Singaporeans submitting for bankruptcy in the primary half of 2024, in contrast with the identical interval final yr.
From January to June 2023, 1,871 Singaporeans utilized for bankruptcy, whereas from January to June 2024, 2,334 Singaporeans utilized for bankruptcy. That’s a few 25% increase.
Out of the two,334 functions, 595 bankruptcy orders had been made.
So, what are some potential causes for this increase?
In early 2024, Alvin Tan, Financial Authority of Singapore (MAS) board member, stated in Parliament that 2023’s bankruptcy functions had been at an 18-year excessive (3,986 in complete by December 2023).
Nevertheless, he famous that not all functions resulted in bankruptcy orders (1,096 complete by December 2023).
“The trend of bankruptcy orders has been largely stable over the recent years and it is also below pre-COVID levels,” he had added.
Tan identified that bankruptcy functions then rose “amid the challenging macroeconomic and financial environment for corporates and individuals in recent years”, in addition to the “higher global interest rates environment”, which brought on home rates of interest to rise sharply.
In a commentary piece earlier this yr, CNA regarded into some potential elements behind the rise of bankruptcy functions in Singapore.
Some issues noticed included the phasing out of pandemic support, climbing rates of interest, and geopolitical uncertainties that have an effect on our nationwide economic system.
One other level of consideration posed by CNA’s commentary was whether or not or not Singapore’s bankruptcy threshold is just too low.
The present threshold to file for bankruptcy is the debtor having incurred not less than a complete of S$15,000 in unpaid money owed.
Earlier than reforms are made to those debt frameworks, nevertheless, “a nuanced analysis of bankruptcy trends is crucial”, the CNA commentary piece said.
“This means considering factors like the range of debt levels, the proportion of business owners among debtors, causes of indebtedness, the proportion of creditor-initiated bankruptcy applications and the effectiveness of creditor recovery in bankruptcy cases,” legal professionals Lance Ang and Adrian Peh, who contributed the article, wrote.
To forestall the problem from being exacerbated, the nationwide monetary schooling programme, MoneySense, actively educates the broader public on cash administration abilities.
Debtors who require extra help may also search assist from avenues corresponding to Credit score Counselling Singapore.
See the annual statistics on bankruptcy in Singapore right here.
Featured Picture Credit score: Needpix.com
