Bankruptcy Act Amended

Increase in threshold of debt owed from $500 to $10,000; bankrupt's passport or travel document could be impounded

Bandar Seri Begawan - By command of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam, the Attorney General's Chambers (AGC) yesterday announced that the monarch has consented to amendments to the Bankruptcy Act (Chapter 67).

In essence, the amendments among others will provide individuals who have been declared bankrupt a "second chance to start anew", which is expected to provide those who have been legally labelled as such with the opportunity to be more financially independent.

A press statement issued by the AGC yesterday explained that the amendments to the Bankruptcy Act (Chapter 67) have come into effect as of December 4, 2012, which has thus subsequently re-updated the decades-old legislature that was initially drafted in the 1960s.

Among the changes that have been put in place by the Committee on the Review of the Legal Framework, Administration and Management relating to the Bankruptcy and Insolvency Regime include the discharging of a bankrupt from bankruptcy through the issuance of a certificate as long as the duration is after three years since the date of commencement of the bankruptcy and the individual's debts do not exceed $100,000 and its effects, after discharge.

It was explained that the initial legislation had no such clause and this had made it difficult for a bankrupt person to enter into contract agreements and that it was difficult for such individuals to find employment.

Another feature to the Act introduced by the Committee, chaired by Dato Paduka Haji Hairolarni bin Haji Abdul Majid with close cooperation from officers at the Prime Minister's Office, the Judiciary, the Attorney General's Chambers and the Public Service Commission, also addresses the issue whereby there have been instances when a bankrupt person is able to travel overseas despite declaring that he/she has no funds to clear his/her debts.

The amendments provide a trustee with the power to direct the Controller of Immigration to impound and retain the bankrupt's passport, certificate of identity or travel document as a means "to prevent" the individual from leaving Brunei Darussalam.

The amendments also provide for the Government of Brunei Darussalam to enter into agreement with two nations, Malaysia and Singapore, for the recognition by each government of the Official Assignees in bankruptcy appointed by the other government, with the effect that if a person is adjudged a bankrupt in Malaysia or Singapore, the property of the bankrupt is situated in Brunei Darussalam, would vest in the Official Assignees of Malaysia or Singapore appointed by the respective governments and all courts in Brunei Darussalam shall recognise the title of such Official Assignee to such property.

The amendments also provide for the imposition of a number of duties on the bankrupt to deliver his property under his possession, books, paper and the like to the trustee and disqualifies the bankrupt to act as a trustee or personal representative. The threshold of debts owned by a debtor to a petitioning creditor has been increased from $500 to $10,000.

The Committee, meanwhile, was established by the command of His Majesty in 2008 with the task to review the existing bankruptcy legislation and to promote balances and safeguards to the rights of both creditors and debtors, among others. ~ Courtesy of Borneo Bulletin

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