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Consequences of debt for extended family

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Kvwinbkk
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Consequences of debt for extended family

Postby Kvwinbkk » Tue, 01 Feb 2011 4:11 pm

I'm not sure if this is the right place to post this, but I'm not sure where to turn to at this moment. I'm married to a Singaporean, but we're living outside of the country.
Unfortunately my in-laws are in a bit of a pickle. My father in law has managed to accumulate a considerable debt without the knowledge of the rest of the family. They are still paying for their HDB home but probably will not be able to pay off the remainder of the mortgage before they both retire.
I'm trying to find out a few things. First of all, can my mother in law be held accountable for my father in law's debt? Secondly, if my father in law is declared bankrupt, what are the consequences? Would they lose the house? What other ramifications does bankruptcy hold in Singapore? Finally, is there a way to take away all financial responsibility from my father in law? He's proven beyond a doubt that he is incapable of managing his finances and will drag his family down with him. Making sure that he has to account for every last penny before he gets to spend it seems to be the only option left for him.
Again, I'm not sure if this is the right place for these questions, and I apologize if it's not, but it's difficult to find any information. Because we don't live in Singapore visiting a lawyer's office there is not an option. Any recommendations on who else to talk to about this would be greatly appreciated though.
Thanks.

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ksl
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Postby ksl » Tue, 01 Feb 2011 4:29 pm

Your mother would probably in herit any debt on your fathers passing, though not the rest of the famiy.

You probably need local community help to sort these problems out, you can make an appointment with the local legal advice in your community, the community office will advise on the dates.

They will probably advise to come to some arrangement of payment with HDB for mortgage arrears. Don't feel too embarassed about your position, it needs sorting out.

Maybe you have other sibblings that can maybe help out or even your spouse to get them back in the black, however you may also be financially tight, so you need to ensure that if you do help the money is paid back to you too....Things can be worked out and if the father in law is not capable of running finances, you need to ensure that he is not left in charge before helping out.

Kvwinbkk
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Postby Kvwinbkk » Tue, 01 Feb 2011 4:38 pm

Thanks for the reply, but it's not really an answer to my questions. First of all, it's more a matter of what will happen while my father in law is still alive. If he is declared bankrupt (looks like the damage is too big repair, besides, it's been done before), can they touch my mother in law's salary, savings, CPF, etc?
Also, as I said we don't live in Singapore and are not planning any visits soon, so visiting a local office is not an option for now. My in-laws have tried talking to HDB, but whenever they propose a solution, during the next follow up they have either changed the rules, found new exceptions which change the situation, and so on and so forth. HDB has been utterly useless in providing any answers. My mother in law was forced to stop paying for the house for several month just so that she could get a warning letter which would entitle her to actually talk to someone in person!

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Postby Mad Scientist » Tue, 01 Feb 2011 5:01 pm

Kvwinbkk wrote: They are still paying for their HDB home but probably will not be able to pay off the remainder of the mortgage before they both retire.

Firstly I would like to ask you where did they attain their mortgage , thru HDB or the local banks. If it the former then if your FIL is declared bankrupt , no creditors can take the HDB house away, if it the latter, debt from bank or financial institution can go to the court to get an injunction to sell the HDB house to recover their debt. Personal debt taken out from these avenues has alot of ramification as the liabilities are attached to personal wealth. Under the mortgage instrument first right of ownership is the bank not YOU until you have settled all debts. Thanks to Mah Bow Tan all new ownership of HDB house has to get bank loan Not HDB loans as it is no longer offered

I'm trying to find out a few things. First of all, can my mother in law be held accountable for my father in law's debt?

It depends if your MIL is the co signatory of the guarantor then she is liable. If not only FIL is liable for debt

Secondly, if my father in law is declared bankrupt, what are the consequences? Would they lose the house?

As I have answered you above, the scenarios are there. Under Chap 11 or Chap 13 forced or voluntary bankruptcy, the former will have more leeway than the latter as OA will take over your personal wealth. Remember bankruptcy goes to individual no one else

What other ramifications does bankruptcy hold in Singapore?

All his personal wealth will be sold to recover the loss. His traveling will need permission from the Registrar. He cannot and will never be able to own even a credit card nor any big ticket items

Finally, is there a way to take away all financial responsibility from my father in law?

There are budgeting services and social workers that can help. SOS is one of them

Thanks.
The positive thinker sees the invisible, feels the intangible, and achieves the impossible.Yahoo !!!

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ksl
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Postby ksl » Tue, 01 Feb 2011 7:36 pm

Yes sorry I couldn't be more helpful, as the majority of people here are expats and PR's, though many do know where to go for help.

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Postby Mad Scientist » Wed, 02 Feb 2011 4:09 am

Continuing on this subject

Please see the link

http://app2.ipto.gov.sg/IPTOServices/In ... fault.aspx

HDB house that is under HDB loan not Private bank upon will be untouched. However if your total debts are less than 100k, the Court will have you placed under the DRS scheme. The concern is when the banks start to sue you then all the legal fees may push your total to more than 100k. OA may not placed you under DRS scheme if the debt is more than that.

A bankrupt upon judgement can keep only the basic stuff in the house. During the writ of seizure by the bailiff and the receivership, your home content will be at risk unless you have receipts to prove that those stuff does not belong to you, all other contents in the house will be seized. WOA warrants usually takes place within One week from the court judgement if there is no contest from the bankrupt person

Voluntary bankrupt can only work if the creditors agrees in your repayment schedule

In any case, your FIL life will be ruined as he has to surrender his PP, his finances will be monitored.

If he chose not to pay any of the monies owed, the common practise by the court is to have him pay a tenth of what he owed over a period of 5 years approx until he is a discharged bankrupt. As all banks has insurances against bad loans , using this judgement the bank will recover their loss thru the insurance and government bonds in placed.
However your FIL will go down the track as someone cannot hold more than a five hundred dollars in his bank account. He can still work etc... Only thing movement and money is curbed. Hope this helps
The positive thinker sees the invisible, feels the intangible, and achieves the impossible.Yahoo !!!

Kvwinbkk
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Postby Kvwinbkk » Wed, 02 Feb 2011 12:45 pm

Thanks for the info both of you. I appreciate your time to help me get some answers. I hope it doesn't go this far, but at least we have a bit of an idea of the implications if it does.
Thanks again.


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