Understanding The Debt Collection Process in Singapore

Understanding The Debt Collection Process in Singapore. This article outlines the legal framework of debt collection in Singapore for creditors who are owed money and wondering how to pursue the collection process. The debt collection process in Singapore is subjected to several different Singapore laws.

The size of the debt will determine which law will be applicable. The method involved in the collection process typically involves lawyers, the Court, and, if needed, debt collection agencies. The currency referred to in this article is Singapore Dollars.

The Size of the Debt

How much the debtor owes you will determine how to proceed with the debt collection process. This is because there are different laws and courts to pursue debt collection.

Is the debt amount $20,000 or less?

If the amount owed to you is $20,000 or less, you can submit your claims to the Small Claims Tribunal Court. The amount can be as high as $30,000 if both the creditor and the debtor agree to the amount. You can submit a claim without needing to hire a lawyer. Claims for money owed typically involves unpaid sums for the sale of goods and services or the rental of assets.

Your claims must be approximately two years old from the date of payment due. After your file is opened, the creditor and the debtor must attend a mediation session by the Court. Both the creditor and debtor must represent themselves, as no lawyers are allowed. A referee will decide whether to accept or reject the claim if both parties disagree.

You can submit your claim to the Small Claims Tribunal Court online to start your claims process.

Is the debt amount more than $20,000 and less than $100,000?

Suppose the amount is more than the amount the Small Claims Tribunal Court allowed. In that case, you need to file a civil suit in the State Court of Singapore to pursue bankruptcy for an individual debtor or a winding up of a company if the debtor is a company.

For an amount less than $100,000 and the debtor is an individual, an alternative law is applicable instead of bankruptcy: the Debt Repayment Scheme. This Scheme is still part of the court process whereby the State Court will appoint an Official Appointee to monitor the debtor’s payments.

Under this Scheme, the debtor must pay according to a repayment schedule set by the Official Appointee. Once the repayment is completed, the Official Appointee will issue a Certificate of Completion, and the Debt Repayment Scheme will end.

For the Debt Repayment Scheme to apply, the debtor must be an individual or in business as a sole proprietor or a partner in a partnership. The debtor must be currently employed or earning an income and is not bankrupt. The debtor gets to keep all of his assets.

If the amount is more than $100,000: Bankruptcy or Winding-up Order

Under Singapore laws, to pursue this course of action means that the creditor can get the State Court to grant bankruptcy status to the individual debtor. In the case of a company for a winding-up order, the company becomes insolvent and will undergo liquidation.

The debt collection process for a bankruptcy or liquidation case means that the debtor’s assets are to be sold off to repay the debt amount. This also means that the Court will appoint a receiver or liquidator to take possession of the help of the debtors. The receiver will manage the sale of the support for up to the amount of debt due and other expenses incurred.

Appointing a lawyer or a debt collection agency

You will need to appoint a lawyer unless the amount is small enough to qualify for a Small Claims Tribunal Court.

Appointing a lawyer

The lawyer will start with a background check of the debtor and a letter of demand. If this action is not effective on the debtor, the lawyer will then begin a claim for a civil suit for the process of either a Debt Repayment Scheme or a bankruptcy or insolvency case.

The case involving lawyers and the Court under Singapore laws takes a while as there are many steps involved in the debt collection process to pursue bankruptcy or liquidation.

Should you appoint a lawyer or a debt collection agency?

To expedite the debt collection process, choose to appoint a debt collector or an agency instead of a law firm. This is for those who need more patience to wait for a court order. However, the debt collection agency may end up harassing the debtor for the payments, which could involve illegal practices.

Methods such as vandalism, threatening behavior, harassment, and intimidation are all considered criminal acts under Singapore law. In such cases, the debtor has the right to file a complaint to seek protection from harassment. The debt collection agency or the creditor can be charged with criminal acts if found guilty.

So, as a creditor, you must choose your debt collection agency wisely. Choose those with ethical codes of conduct.

Understanding The Debt Collection Process in Singapore – Conclusion

Understanding The Debt Collection Process in Singapore. In summary, the debt collection process under Singapore law varies according to the amount owed to the creditor. The easiest way is for those small amounts under $20,000. The best course of action for more substantial sums owing is to hire a lawyer to begin a claim for you.