Insolvency Act - Changes (part 2 of 5)

In last week’s article, I wrote about the amendments to the Insolvency Act 19Direct67 (“IA”) regarding the summoning of meeting of creditors as well as remote communication technology.

The link to that article can be found here - https://www.dhirubhai.net/pulse/insolvency-act-changes-part-1-5-choo-dee-wei-lstkc/ ?

This week’s article, being part 2 of 5, shall touch on the amendments to Section 33B of the IA (“S.33B”).

S.33B concerns objection by creditor to a bankrupt’s discharge under Section 33A of the IA (“S.33A”). S.33A is where a bankrupt is discharged by Certificate of the Director General of Insolvency (“DGI”).

A bankrupt’s discharge under S.33A is at the DGI’s discretion but can only be done at least after 5 years from the bankruptcy order and subject to S.33B.

In terms of timeline of discharge under S.33A:-

1. The DGI serves a notice of his intention to discharge the bankrupt on all creditors who have filed their proof of debt;

2. Creditors have 21 days to furnish a notice to object setting out the grounds of objection, failing which it’s deemed that the said creditor has no objection;

3. The scope to object is limited. Creditors can’t object if:-

3.1? a bankrupt who was adjudged bankrupt by reason of him being a social guarantor;

3.2 a bankrupt who is registered as a person with disability under the Persons with Disabilities Act 2008;

3.3 a deceased bankrupt; and

3.4 a bankrupt suffering from a serious illness certified by a Government Medical Officer.

4. But if a creditor furnishes its notice to object (within time) and if the DGI rejects it, the creditor has the right to make an application to court (within 21 days) for an order to stop the DGI from issuing a certificate of discharge; and

5. The court may then dismiss the application or make an order that for a period of maximum 2 years, the DGI can’t issue the certificate of discharge.??

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As such, the bankrupt would be discharged either when the court dismisses the application or after a maximum of 2 years thereafter. ??

As for the current amendments to S.33B, the situations where creditors cannot object to a S.33A discharge has been expended to include the following:-?

(a) a bankrupt who is incapable of managing himself and his affairs due to any mental disorder, as certified by a psychiatrist from any government hospital. The words “mental disorder” and “psychiatrist” have the meaning assigned to them in the Mental Health Act 2001; and ?

(b) a bankrupt aged 70 years and above and in the opinion of the DGI, is incapable of contributing to the administration of his estate.

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In other words, the amendments above have increased the circumstances where a creditor cannot object to a discharge by Certificate of the DGI.

?In next week’s article, we will look at the amendments to the provision of automatic discharge of bankruptcy.