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Debt Recovery against someone with no assets?

A debt recovery is a common legal issue in Singapore. Be it a debt recovery for payment of work done or debt recovery of a friendly loan provided, and most debtors failed to make a payment due to the financial constraint suffered by the debtor or an existing financial commitments that has higher priority than the debt owed to you. Consequently, while debt recovery can be a straight-forward process, each debt recovery can be unique to their own circumstances and situation,

As such, to ensure the higher probability of a successful recovery of the debt owed to you, it is prudent to know your debtor and to perform a due diligence check on your debtor before commencing any legal actions against them. 

Knowing your Debtor and Performing Due Diligence

Before commencing legal action against the debtor, you may wish to know more of the debtor. Not only do you need to know the identity of the debtor, to increase the likelihood of a successful claim, but you will also need to know the financial status of the debtor, the debtor’s employability and the debtor’s assets in Singapore.

There may be occasions where it may not be economically viable to initiate a legal action against a debtor with no money nor assets to repay the debt to you. A legal action is expensive and acrimonious. As such, while you may be able to recover some legal cost incurred in the legal action upon obtaining the judgment against the debtor, the legal action may be for nought if the debtor does not have the financial capability to make any payment, to begin with.

You may, therefore, wish to seek legal advice to understand your case better and to know the alternative step that may be best suited for your claim.

While legal action may seem to be the best (and common) method in claiming for the debt owed to you, it may not be the most suitable option when the debtor has no money or assets available. You may, therefore, wish to consider the following alternative method available to you:

Speak to the Debtor

In some occasion, the debtor is merely stuck in a bad financial position and is intending to make payment as soon as he can. A polite but firm conversation with the debtor can allow you to arrange a settlement before the situation is escalated further. You may also be able to understand the likelihood of your success in claiming against him.

However, do seek legal advice before speaking to the debtor to ensure that you are not being taken advantage of by the debtor.

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Without Prejudice Meeting or Mediation

A legal action is expensive and time-consuming. It may, therefore, be wise for you to attempt to negotiate for a settlement or payment arrangement of the debt before initiating a legal action.

You may also seek mediators to assist you in your claim. A mediator is a skilled professional trained to facilitate communication between the parties in conflict in view of helping parties in reaching a voluntary resolution to their dispute. A mediator can assist the parties by exploring the option available to them before suggesting a resolution to the parties.

Letter of Demand

A letter of demand from a law firm usually has a strong effect on a debt recovery settlement. A good letter of demand can show the exact amount of monies owed to you and the consequences of the non-compliance thereafter. While a letter of demand cannot guarantee payment from the Debtor, it can act as a steppingstone to initiate a settlement discussion with the Debtor.

Statutory Demand

If the Debtor is an individual and the debt owed to you is more than $15,000.00, you may wish to consider requesting a law firm to assist you in the issuance of a Statutory Demand against the Debtor. If the Debtor still fails to make payment within 21 days of the issuance of the Statutory Demand, the Debtor may be declared bankrupt and personal restrictions may be imposed against him.

Obtaining Judgment and Executing Judgment

Although a civil action may not be financially viable, obtaining a Judgement from the court may still be the most logical step to be taken against the Debtor. You may execute the Judgment obtained by you against the Debtor anytime within six (6) years from the date of the issuance of the Judgment against the Debtor.

There are many ways of executing the Judgment against the Debtor to recover your debt. As it may be a long and expensive process, you may wish to seek legal assistance to understand your case further.

Arresting the Debtor  

 Unfortunately, as owing money is not a criminal offence in Singapore, the Singapore Police Force may not be able to assist you in the recovery of your debt.

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Our specialised lawyers and their team are standing by to assist you. Our first consultation is free.

The information contained within this website contains general information about our lawyers, Law Firm and procedures and is not intended to constitute legal advice.
Any person viewing or receiving information from this Website should not act or refrain from acting, on the basis of any such information without first seeking appropriate legal advice.
Please consult a lawyer for specific review of your case and advise. 

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