How To Discharge From Bankruptcy Order
1. If I have been declared bankrupt, what should I do to discharge myself?
There are several methods for obtaining a discharge from bankruptcy, which can vary depending on the facts. A person who is declared bankrupt may remove his /her bankruptcy status either by way of discharge application pursuant to section 33, 33A and 33C of the Insolvency Act 1967 or annulment application pursuant to section 105 Insolvency Act 1967.
2. What is Annulment Application?
If the bankrupt can prove that he/she should not have been adjudged bankrupt, or if the debts have been paid in full to the creditors, he/she can apply to court for annulment. Once an annulment order is granted, the effect is as if a bankruptcy order has never been made against the individual.
3. If I am unable to secure an annulment, how can I release from bankruptcy?
The bankrupt can released from bankruptcy by way of discharge. There are three methods of discharge:-
- (i) discharge via court order pursuant to section 33 of the Insolvency Act 1967;
- (ii) automatic discharge pursuant to section 33C of the Insolvency Act 1967;
- (iii) discharge from Director General Insolvency (“DGI”) pursuant to section 33A of the Insolvency Act 1967.
4. What is the difference between these three methods of discharge?
| Method of Discharge | Discharge via Court Order | Automatic Discharge | Discharge from Director General Insolvency |
| How to apply? | A bankrupt MUST obtain from the DGI a certificate specifying the number of their creditors of whom the Director has notice irrespective of whether they have proved their debts.
Apply to the High Court |
DGI will automatically issue a notice of discharge to the creditors provided that the requirements have been satisfied. | Apply to the DGI |
| When can apply? | Any time after the bankruptcy order | Expiration of three years from the date of submission of the Statement of Affairs | Expiration of five years from the date of the bankruptcy order |
| Factors of consideration | Court will investigate DGI’s report & take into consideration bankrupt’s behaviour. | The bankrupt has already filed and submitted the statement of affairs.
The bankrupt has filled out an application form and undertaking to comply with the target contribution and to file an account of moneys and property every six (6) months The bankrupt has achieved the target contribution as determined by the DGI taking into account some of the matters set forth in the Insolvency Act 1967. |
Subject to the DGI’s discretion. Case law reflects that the factors will be
· cause of bankruptcy, · age/health, · assets of the bankrupt, · conduct of the bankrupt, · duration of bankruptcy. |
5. What is the difference between annulment application and discharge application?
An annulment refers to the termination of a Bankruptcy Order that was made against a bankrupt, as if he was never made bankrupt and he will relieved from all debts.
On the other hand, discharge from a bankruptcy order relieves the bankrupt from all of his/her debts provable in the bankruptcy except for debts due to the Government, State, and Attorney General in respect of bail bonds and any provable debts which were incurred by means of fraud or fraudulent breach of trust. The bankrupt will still be known to have been a bankrupt at one point but are no longer one.
6. If I have been declared bankrupt, can I travel oversea?
A bankrupt may not travel overseas unless the bankrupt obtains the written permission from the DGI or court. The application form with supporting documents must be sent to the Branch that administers his bankruptcy case.
7. If I have been declared bankrupt, can I make payment to the creditor directly to settle my debt amicably?
A bankrupt is not allowed to make payment to the creditor directly. All payment has to be made to the DGI. The payment will be credited into the bankrupt’s estate account and will be distributed to the creditors who have filed in Proof of Debt and the Debt has been admitted.
8. If I have been declared bankrupt, can I ask the DGI for a discount on my debt?
Cannot. DGI has no power to reduce the amount of debt that has been filed by creditors. If a bankrupt intends to reduce the amount of debt for the purpose of making full settlement, he should write in or meet the officer at the particular Bank stating his intention to do so.
In the event the Bank agrees to lower the amount of debt, the bankrupt has to request confirmation letter from the Bank and make payment with the new agreed amount to the DGI. DGI will then proceed to declare the dividend to creditors.
If you have any questions or require any additional information, please contact our lawyer that you usually deal with.