SINGAPORE — A review of bankruptcy and insolvency laws and the development of a framework for resolving community disputes are two areas the Ministry of Law will be focusing on this year.

Law Minister K Shanmugam told the House yesterday that his ministry has started a review of current bankruptcy discharge policies, with a view to possibly liberalising them in some cases, particularly those relating to failed businesses and those who piled up debts from taking unsecured consumer loans.

He was responding to Sembawang GRC Member of Parliament (MP) Vikram Nair, who said during the debate on the Law Ministry’s spending plans that a more liberal bankruptcy regime would give entrepreneurs who fail the opportunity to pick themselves up later. Saying that it would also make companies that offer unsecured credit more careful about doing so, he suggested that automatic discharges be granted after a number of years.

In reply, Mr Shanmugam said there was “some merit” to the suggestion, but that there was a need to “balance between the creditors’ interests and discharging bankrupts where it is just to do so, and without creating a moral hazard”.

Responding to Mr Patrick Tay (Nee Soon GRC) and Dr Janil Puthucheary (Pasir-Ris Punggol GRC), who raised the issue of resolving community disputes, Mr Shanmugam noted that these disputes can range from noise disturbances to unpleasant smells and are “inherently difficult to resolve”, given that “views are very subjective on what is acceptable behaviour”.

The Ministry of Law will be working with the Ministry of National Development, the Ministry of Home Affairs and the Ministry of Community, Culture and Youth to see if a suitable framework can be developed for resolving community disputes, but it should be borne in mind that “legislation cannot solve all issues”, Mr Shanmugam said.