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LCQ9: Petitions for Bankruptcy Orders

Following is a question by the Hon Eric Li and a written reply by the Secretary for the Civil Service, Mr Joseph W P Wong, in the Legislative Council today (May 30):

Question:

Regarding petitions presented to the court for bankruptcy orders, will the Government inform this Council whether :

(a) it has assessed the reasons for the increasing number of petitions for bankruptcy orders in recent years;

(b) it has statistics on the number and percentage of cases in which the debtors were civil servants or employees of public-funded bodies in all petitions in the past five years; and

(c) a civil servant is required to report to his supervisor immediately upon his knowledge of the presentation of a petition to the court for a bankruptcy order against him, or upon the presentation of such a petition by himself; whether assistance will be provided to the civil servant concerned; if so, of the details; and whether the pension benefits of the civil servant will be affected by his bankruptcy?

Reply:

Madam President,

The Administration's reply is set out below, in the same order:

(a) Based on the information gathered by the Official Receiver's Office in its handling of bankruptcy cases, the increase in the number of petitions might have resulted from the economic downturn in the past few years and more debtors filing their own petitions for bankruptcy.

(b) The following table gives the number and percentage of cases in which the debtors were civil servants:

  1996 1997 1998 1999 2000
  ---- ---- ---- ---- ----
Overall 543 639 893 3,071 4,606
           
Civil servants 7 10 78 342 380
  (1.3%) (1.6%) (8.7%) (11.1%) (8.3%)

We do not have statistics on the number of cases where the debtors were employees of public-funded bodies.

(c) Under the Civil Service Regulations, a civil servant who becomes insolvent or bankrupt, irrespective of whether bankruptcy proceedings have been taken against him, is required to submit, as early as possible, a complete statement of the facts of his case to his Head of Department, for onward transmission to the Civil Service Bureau (CSB). In parallel, the Official Receiver's Office will notify CSB of all cases where bankruptcy proceedings are taken against a civil servant.

To assist a civil servant with short-term financial difficulties, financial assistance by way of advance of salary or loans through departmental relief/welfare funds may be provided to a civil servant for specified purposes, e.g. to cover expenses related to treating the illness of family members and other domestic distress.

Once the officer is adjudicated bankrupt, the Official Receiver or the appointed trustee will, in accordance with the Bankruptcy Ordinance, take over the case, including the role of acting as a mediator between the creditors and the bankrupt. Nevertheless, officers designated by departmental management to handle staff welfare matters will continue to counsel civil servants who face bankruptcy. Where necessary, counselling services by clinical psychologists may also be offered to assist them to tide over the stress and anxiety arising from their situation.

The pension benefits of a civil servant will not be affected if he is discharged from bankruptcy before his retirement. If the bankruptcy order is still in force when he retires, or if he is adjudicated bankrupt after his retirement, the pension benefits that are due to him will be withheld temporarily until the bankruptcy order is discharged. By then, the pension payment withheld during the period of bankruptcy will be granted back to him. During the period of bankruptcy, he may apply to draw down the pension benefits he is otherwise entitled to for maintenance or discharge of debts. These provisions aim to safeguard the livelihood of a retired civil servant in the event of bankruptcy.

End/Wednesday, May 30, 2001
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