Q I AM an undischarged bankrupt and will turn 55 within six months.
I am living in a five-room HDB flat that is fully paid up with my CPF savings.
I have no other property.
After setting aside the three required sums (such as the Minimum Sum), I will have about $200,000 to withdraw from my CPF account.
What am I not permitted to do with the money? What investments can I go into?
Can I still have a bank account to keep some of this money?
Can I give the money to a family member to buy a property?
Can I still invest in unit trusts, annuities or shares?
I have a friend who is also an undischarged bankrupt. As a Singapore Permanent Resident, can he denounce his status and withdraw his CPF savings?
A As an undischarged bankrupt, you are allowed to operate one POSB account only.
You are advised to keep records of savings that you withdraw from your CPF account and deposit into your POSB account.
CPF money is protected from creditors but it is still good practice to keep records of it as it will be mixed with your existing account balance and future deposits from sources such as your income.
Basically, you can do what you like with your withdrawn CPF savings, except that you still cannot own any assets as a bankrupt or invest the money.
Yes, you can give the money to a family member - or anyone for that matter - to buy a property and the property can be held in the family member's name.
The risk is that if your family member decides to keep it for himself, you will face a tough battle to prove your ownership.
Your asking someone else to own a property on your behalf can be deemed illegal and against public policy.
The only asset you can own directly is an HDB flat of five rooms (which you already own) or smaller. For larger HDB flats, you have to seek the approval of the Official Assignee.
You also cannot own a business.
As for the question regarding your friend, the CPF Board does not allow bankrupts who are Singapore PRs to withdraw their CPF before the age of 55, even if your friend denounces his PR status.
And he needs the permission of the Official Assignee to travel out of Singapore.
Matters pertaining to CPF withdrawals are handled by the CPF Board, and not by the Official Assignee.
That applies to Singapore citizens as well.
Singapore citizens who are not undischarged bankrupts and who give up their citizenship are allowed to withdraw their CPF before the age of 55 only when they have obtained citizenship from another country.
Leong Sze Hian
President
Society of Financial Service Professionals
Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to chanteik@sph.com.sg
