Infomation on Debt Repayment Scheme (DRS)  

Debt Repayment Scheme (DRS) is a voluntary pre-bankruptcy alternative by the goverment that seeks a win-win outcome for both the debtor and his creditor:

Debtors avoid bankruptcy, along with its restrictions and social stigma

Creditor's interests are adequately safeguarded

How does the drs work?  

When a bankruptcy application is made to the High Court (“Court”) and the debts owed do not exceed $100,000, the Court may refer the debtor to the Insolvency Office (“IO”) for the Official Assignee (“OA”) to assess the debtor’s eligibility and suitability for the DRS. If the debtor satisfies the qualifying criteria set out in the Bankruptcy Act and the OA assesses him to be suitable for the DRS, the OA will assist the debtor to devise a DRP.

The Introductory Video summarises the DRS assessment process. Click here to view the Introductory Video.

What is a debtor's minimum repayment amount?  

There is no fixed minimum repayment amount. It is determined by taking into account the debtor’s financial circumstances, his income and expenses.

what makes a debtor unsuitable for drs?  

When a debtor fails to comply with the OA’s instructions by not co-operating with the OA (e.g. failed to submit or complete the documents required of him, pay the required fees, or his liabilities exceed $100,000), he will be deemed unsuitable for the DRS and his case will be referred back to Court for the bankruptcy proceedings against him to be heard again. In such an event, the Court, the debtor and the applicant-creditor will be informed of his unsuitability for the DRS.

how will a debtor be eligible and suitable for drs?  

The debtor has to satisfy the following eligibility criteria:

(a) Total liabilities do not exceed $100,000;

(b) Gainfully employed and earning a regular income;

(c) Not been a bankrupt or been on the DRS in the last 5 years;

(d) Not been subject to a court-based arrangement in the last 5 years; and

(e) Not a sole-proprietor or partner and/ or should not be a director in any firm.

If the debtor meets the eligibility criteria, the OA will then assess his suitability for the DRS based on the submission of relevant forms and supporting documents.

The OA will inform the outcome of the assessment to the Court, the debtor and the applicant-creditor before the end of period of adjournment. The debtor will be deemed ineligible for the DRS if he fails to meet any of the criteria stated above, and the OA will not assess the case further.

The above infomantion are share by and courtesy of http://www.ifaq.gov.sg/MINLAW/apps/fcd_faqmain.aspx?FAQ=11335