Debt can be overwhelming, but it doesn’t always have to lead to bankruptcy. For individuals with debts under $150,000, Singapore’s Debt Repayment Scheme (DRS) offers a structured path to financial recovery. Here’s how the DRS works and why it may be the solution to your debt problems.

What is the Debt Repayment Scheme?

The Debt Repayment Scheme is an alternative to bankruptcy for individuals who can still earn a regular income. Instead of declaring bankruptcy, which has long-term effects on your financial standing, the DRS allows you to create a manageable repayment plan, helping you regain control of your finances.

With the DRS, you’ll work closely with the Official Assignee (OA) and DRS administrators to create a plan that satisfies your creditors while allowing you to meet your own financial needs.

Who Is Eligible for the DRS?

Eligibility for the DRS is determined by several factors, including:

• Your total debt should not exceed $150,000.
• You must be employed and earning a stable income.
• You cannot have been placed on the DRS or declared bankrupt in the last five years.
• You cannot have been part of a court-based debt settlement in the past five years.
• You must not be a sole proprietor or business partner.

If you meet these criteria, you could be considered for the DRS.

The Process of Entering the DRS

After determining your eligibility, the OA will assess your case. You’ll need to submit essential documents such as a Statement of Affairs and an Income and Expenditure Statement. Once your case has been reviewed, you’ll receive a notice to submit a proposed debt repayment plan online.

Your creditors will then review the proposed repayment plan during a meeting arranged by the DRS administrators. Once a final repayment plan is agreed upon, you will be responsible for making monthly installments as outlined in the plan.

What If You Don’t Qualify?

If, for any reason, the OA determines that you are unsuitable for the DRS or you fail to comply with the OA’s instructions, your case will be referred back to court for bankruptcy proceedings. Therefore, it is crucial to remain diligent and ensure you meet all the necessary requirements.

Conclusion

The Debt Repayment Scheme offers a second chance for individuals struggling with debt, allowing them to repay their obligations in a structured and manageable way. If you’re facing financial difficulties, consider exploring the DRS as a solution. It can help you avoid bankruptcy and provide you with the opportunity to rebuild your financial stability.