More bankrupts were discharged last year than at any time in a single year as the Insolvency Office upped its efforts to help deserving cases. This happened before a new framework kicked in last August which, among other things, raised the minimum debt that needs to be owed before a person may be made bankrupt, from $10,000 to $15,000.

Last year, some 4,359 individuals were released from their debts, up from 3,499 in 2015.

Responding to queries from The Straits Times, the Law Ministry (MinLaw) said the record number was the result of the Insolvency Office increasing its efforts to discharge deserving cases from bankruptcy before the implementation of the Differentiated Discharge Framework.

Besides the new minimum debt level, the framework creates a more rehabilitative regime and sets out fixed exit points for bankrupts to be discharged. If prescribed conditions are satisfied, first-time bankrupts can generally be discharged between five and seven years.

"These clear timeframes will give bankrupts an incentive to adhere to their payment plan, their conditions of bankruptcy, and seek gainful employment as a means of achieving their discharge," said the Insolvency Office website.

Repeat bankrupts will generally be eligible for discharge within seven to nine years. For applications made from Aug 1 last year, bankrupts are discharged either by the High Court, which has to be satisfied by the grounds presented during the hearing, or by the Official Assignee (OA). The OA has to certify that the bankrupt has met the relevant term in bankruptcy and paid the total contributions in full, among other things.

Around 1,800 people fall into bankruptcy a year, said MinLaw.

"The OA will manage the cases to ensure a certain level of parity in the treatment of existing and new bankrupts, while balancing the interests of the creditors and the bankrupts. Cases most likely to get discharged would be those where the bankrupts have been cooperative and where all administrative matters have been concluded," it added.

The main reasons for bankruptcies include overspending, business failure and unemployment, said MinLaw.

In addition to moves by the OA to rehabilitate bankrupts, the Community Justice Centre (CJC) set up a satellite office - launched last month - at the Supreme Court.

Volunteer lawyers are available there on Thursdays for a start, as many bankruptcy cases are heard on that day, said CJC executive director Leonard Lee. The move comes as more people are seeking legal advice from the CJC - an independent charity - on bankruptcy issues.

There were 2,704 bankruptcy applications made by individuals last year, up from 2,587 in 2014, according to MinLaw statistics.

CJC saw 61 such cases in the second half of last year at the State Courts, under its on-site legal advice scheme. This is an increase from the 49 cases it saw from January to June that year.

In one instance, a man's company was sued by his creditor after his employee leased a car in his firm's name for $61,000, said Mr Lee. The employee, who was also his friend, signed the agreement without the company's official stamp while the owner was away for more than two months. The employee then went missing.

In visiting the CJC, the business owner sought advice on whether his bank loans would be affected by the bankruptcy claim and his next course of legal action. A lawyer advised him accordingly.

Lawyer Rajan Chettiar, who has been volunteering with the CJC at least once a month for three years, said the new centre is helpful as individuals filing for bankruptcy likely cannot afford a lawyer.

He said demand for such legal advice may continue to increase.

"Times are bad, and many people cannot pay off their debts," he added. "Filing for bankruptcy can be one of the better ways out so they don't have to deal with creditors, but the challenge is the consequences. In a month, we receive at least five new callers at our law firm enquiring about bankruptcy and this has been consistent in recent years."