Debt Repayment Scheme in Singapore

What is the Debt Repayment Scheme (“DRS“)?

The DRS is a sanctioned plan for the debtor to pay off his creditors in accordance with the DRS. The Official Assignee (“OA“) is in charge of administering the scheme.

Why apply for the DRS?

The DRS prevents unsecured creditors from proceeding with any legal action against the debtor unless leave is granted by the court. The objective of the DRS is to assist debtors to pay their debts by working out a suitable repayment schedule and paying their debts over a fixed period of time. Furthermore, the sooner you start on the DRS, the less you will be paying in the long run as interest on the claims filed by your creditors will stop on the day you start on the DRS.

How do I apply for the DRS?

To apply for the DRS, you must first file a Debtor’s Bankruptcy Application. If the court is satisfied that you qualify for the DRS, your case will then be adjourned for the OA to assess your suitability for the DRS. Alternatively, if your creditors had already taken out bankruptcy proceedings against you, the court will refer you to the OA to assess your eligibility to enter the DRS. 

Am I eligible for the DRS?

You are eligible for DRS if:

  • Your total debts do not exceed $100,000;
  • You have not been a bankrupt any time during the last 5 years;
  • A voluntary arrangement in respect of the debtor is not in effect, and was not in effect within the past 5 years;
  • You are not subject to any DRS and have not been subject to any such scheme in the last 5 years;
  • You are not a sole proprietor or a partner in a partnership.

However, it is not enough to simply fulfil these criteria. You must also be honest and transparent with the OA. If the OA deems the debtor unsuitable, the OA will report to the court accordingly and the court will proceed with the bankruptcy application. Therefore, you must not:

  • Submit any information or document that is false or misleading to the OA in relation to your financial affairs;
  • Fail to disclosure any information relating to your financial affairs that is required by the OA;
  • Fail to disclosure your property or any disposal of your property to the OA; and
  • Feign losses and expenses to account for your property when reporting to the OA.

What happens if I meet the Eligibility Criteria for DRS?

If you meet the criteria required for DRS, the OA will assist you in devising a Debt Repayment Plan (“DRP“).

The OA will require you to submit a statement of your financial affairs together with your proposed DRP (the repayment period not exceeding 5 years). Specifically, the statements must be filed in the following order:

  • Statement of Affairs;
  • Income & Expenditure Statement;
  • DRP;
  • Supporting Documents.

What happens after submission of documents?

Once the documents have been received, the DRS administrator will review them. A meeting with the creditors and OA will be convened to discuss your approved monthly instalment and the terms and conditions of your DRP with your creditors. The OA may also modify terms in your proposed repayment plan before meeting with your creditors to approve the DRP.

Attending the meeting with your creditors is mandatory; if you are unable to attend the appointment, you must inform the OA at least 3 days prior to the meeting date. Otherwise, you may be deemed unsuitable for DRS and be referred back to court to continue the hearing of your bankruptcy application.

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What happens after the DRP is approved?

Once the OA has approved your DRP, you will begin making your repayments to the OA. However, be aware that your DRS status will be part of your public record and be visible to everyone.

What Are Your Duties after DRS is approved

It is important to adhere to the following duties imposed on you due to the DRS:

  • Disclose to the OA your property;
  • Disclose to the OA any disposal of your property within the 5 years before the start of the bankruptcy proceedings against you, before the completion date of the DRS;
  • Attend any meetings with your creditors as and when arranged by the OA;
  • Not enter into any further debt exceeding $1,000 without disclosing your DRS status to the lender;
  • Keep the OA informed of your place of residence and any other contact details required by the OA at all times;
  • Inform the OA of any change in your employment details;
  • Provide all information truthfully as and when required by the OA with respect to the DRS;
  • Ensure that the proof of debts filed by your creditors are accurate and correct;
  • Adhere to the terms and conditions of the approved DRP.

What happens on completion of the DRS?

Once you have successfully repaid your debts in accordance with the terms of your DRP, the OA will issue you a Certificate of Completion. The Certificate of Completion will release you from all debts provable under the DRS. However, if the OA has reason to believe that you did not comply with your duties before and after the DRS is approved, the OA reserves the right to issue a Revocation of your Certificate of Completion. You will then be liable for all debts you had previously been released from.

What happens if I fail to comply with my obligations under DRS?

If you fail to repay your debts according to the terms of your DRP or fail to comply with your duties under the DRP, the DRS will end and the OA may issue you a Certificate of Failure. This will allow your creditors to initiate fresh bankruptcy proceedings against you.

How we can help

The DRS is a very useful option that you should try to take advantage of, because you will not be adjudged a bankrupt and be listed on the bankruptcy register. You will not suffer the same restrictions that bankrupts suffer e.g. the restriction on travelling. If you are facing bankruptcy, please consider contacting our lawyers as we are experienced in such matters, and we will have a fruitful consultation with you on your available options and how you may qualify for the DRS.

Contact Us today to schedule a free consultation where we can advise you on your situation and provide you with solutions.

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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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Enquiry from Emerald Law


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