Are you experiencing restless nights over the mountain of debt you’re struggling to stay on top of? If so, you're not alone. In Singapore, the amount of debt that people owe is on the rise, and it's becoming increasingly difficult to manage. The Debt Repayment Scheme offers the opportunity for individuals in Singapore to be freed from their loan debts before having to file for bankruptcy.  

When you feel as though you’re past the point of no return with your debt, declaring bankruptcy is the most obvious last-resort option to relieve you from your debt burden, but it comes with serious consequences, including restrictions to overseas travel, restrictions in managing a business, poor credit score which may hinder you from getting a loan or securing a job – and not to mention, the social stigma. In this article, we will provide you with a comprehensive guide to the Debt Repayment Scheme in Singapore 2023, including an overview of what it is, how it works, and its advantages and disadvantages. Read on to learn more. 

What is the Debt Repayment Scheme in Singapore?

An initiative that started in 2009, Singapore’s Debt Repayment Scheme is a pre-bankruptcy scheme offered to debtors who are financially overburdened and unable to repay their debts. Under the Debt Repayment Scheme, individuals are put on a fixed timeframe of up to 5 years to repay their unsecured debts with no additional interest charged. This way, both the interest of the debtor and creditor are safeguarded. 

When you are placed under the Debt Repayment Scheme, a court-appointed offer known as the Official Assignee (OA) will assist in devising a suitable monthly debt repayment plan. During this time, all unsecured creditors will not be able to take any legal action against you without court permission. All interest on your debts will cease once your Debt Repayment Scheme takes effect. After repaying all your debts under the Debt Repayment Scheme, individuals will be able to begin a new financial life with a clean slate.  

In addition to helping individuals get out of debt, the Debt Repayment Scheme 2023 also places emphasis on rehabilitation and instilling an awareness of financial responsibility so that debtors can avoid getting into serious debts again or bankruptcy in the future.  

Who is Eligible to Apply for the Debt Repayment Scheme in Singapore 2023?

Individuals applying for Debt Repayment Scheme in Singapore must meet the following eligibility criteria, which include: 

  • You must be employed with a regular and stable income.

  • Your total debt should not exceed S$150,000

  • You must not be in any form of a business partnership or a sole proprietor

  • You must not have been declared bankrupt in Singapore within the past 5 years

  • You must not have entered into any voluntary arrangement with your creditors in the past 5 years

  • You must not have used DRS previously within the past 5 years


If an individual meets all these requirements, then he or she is eligible to apply for the scheme. After submitting an application, there is an assessment process that takes place to determine if an individual is indeed suitable for participation in the scheme before being approved. Keep in mind that even if you do meet all five criteria, there is still no guarantee that your application will be accepted, and each individual case is assessed on its own merits.

Advantages of the Debt Repayment Scheme

Zero-interest rates 

The biggest advantage of the Debt Repayment Scheme in Singapore is that it allows debtors to make loan payments on their outstanding debts without having to pay any interest on them. This means that they can focus all their efforts and resources on paying off their debt in full instead of worrying about having to pay additional interest charges along with it. This makes it easier for debtors to manage their finances and ultimately helps them clear their debts in a shorter period of time.

Greater freedom than bankruptcy 

Unlike filing for bankruptcy, which comes with restrictions regarding travelling overseas and business engagements, opting for the Debt Repayment Scheme gives debtors significantly more freedom. They are allowed to engage in business activities and own their property.

Protected from legal action taken by creditors 

Unless granted permission by a court of law, individuals under the Debt Repayment Scheme are otherwise protected from legal action taken by unsecured creditors against the debtor. With this protection, debtors can work on paying off their debts without fear of being taken to court for non-payment or other violations of their contracts with creditors.

Disadvantages of the Debt Repayment Scheme

Public Record of the Debt Repayment Scheme 

One major disadvantage of the Debt Repayment Scheme is that when you apply for and are accepted into it, your DRS status will be on the public record and visible to creditors and financial institutions who wishes to see it. 

You can’t apply on your own

Another disadvantage of the Debt Repayment Scheme is that it cannot be applied for directly by an individual; rather, it must be initiated either by yourself voluntarily or by one of your creditors and referred from the High Court. This means that even if you meet all eligibility criteria, it may take some time before you have access to the program and can begin paying off your debts through it.

It's not free

Although debt repayment plans through DRS can help reduce overall costs incurred from debt, there are still administrative fees and charges associated with enrolling in this scheme which can add up over time. It is important to factor these costs into your budget when considering whether or not this option is right for you.  

Other Ways to Manage Debt

In addition to Debt Repayment Scheme, you should also be aware of and consider alternative debt management solutions in Singapore before declaring bankruptcy or deciding the best solution for you.

Debt Management Programme

Offered by the Credit Counselling Singapore (CCS), the Debt Management Programme is a debt repayment arrangement for borrowers who are in genuine financial distress to negotiate better terms with their creditors. It helps individuals better manage their debts and get out of debt faster through education, credit counselling, and facilitate debt restructuring. 

Debt Consolidation Loan

A debt consolidation loan is a type of personal loan that allows you to roll your existing debts into one easy-to-manage loan —typically at lower interest rates—so that you can effectively reduce the total repayment amount for your debts and pay off your debts faster. With one single monthly payment each month, getting a debt consolidation loan greatly simplifies debt management and makes it easier to keep track of your repayment progress. 

If you are looking for the best personal loan interest rates and terms that suit your specific needs, Lendela is a helpful tool. As Singapore’s leading personal loan comparison website, it provides individuals with pre-approved and personalised debt consolidation offers in Singapore and lets them easily compare the best options for their needs. The application process is simple, and you only have to apply once. Moreover, Lendela only works with trusted banks and financial institutions, so you can rest assured that you’re getting the right deal.

Key Takeaways

  • The Debt Repayment Scheme in Singapore is a pre-bankruptcy plan that allows debtors to repay their outstanding debt within a set timeframe without additional interest charges levied. It is administered by the court-appointed Official Assignee (OA).
  • Individuals under the Debt Repayment Scheme are entitled to zero-interest rates, greater freedom compared to bankruptcy, and protection from legal action from creditors.
  • However, their Debt Repayment Scheme will be on public record, visible to everyone; and the scheme cannot be applied directly by the individual.
  • Apart from the Debt Repayment Scheme, those struggling with debt may also consider alternative debt management solutions, such as the Debt Management Programme and Debt Consolidation Loans.

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