A debt repayment scheme allows you to regain financial freedom by allowing you to legally repay debts within a stipulated time frame and avoid bankruptcy. However, it is not a suitable option for everyone as you must meet certain criteria to qualify.
For one, you must be employed and earning a steady income to prove that you can afford your monthly instalments under the DRS arrangement. You must also not have been in any form of legal debt management arrangement within the last five years. The OA will scrutinize your documents and hold meetings with your creditors to assess if the DRS is suitable for you.
Understanding the Debt Repayment Scheme: A Path to Financial Freedom
The DRS is considered the last resort before bankruptcy as it helps you work out a new loan payment plan with your creditors. This is managed by an official called the OA who is appointed by the High Court. This gives debtors the chance to stay in possession of their property and enables them to keep paying off their debts with affordable payments over up to 5 years. It is also easier for creditors to recover their debts under the DRS as compared to bankruptcy where they will have to rely on the Official Assignee’s efforts to identify and recover assets.
Another advantage is that a debtor on DRS can still maintain his bank accounts unlike a bankruptcy. He will not have to seek approval from the OA to travel out of Singapore while he is on this program.…