20 Apr 2007 Posted in Press releases
The public consultation is now closed.
To view MinLaw’s response to feedback received on the proposed Debt Repayment Scheme, please click here.
The Ministry of Law and the Insolvency & Public Trustee’s Office (IPTO) have issued a public consultation paper on the proposed Debt Repayment Scheme (DRS). The proposed scheme was announced by Senior Minister of State for Law and Home Affairs Associate Professor Ho Peng Kee during the Committee of Supply Debate on 2 March 2007.
The DRS seeks a win-win outcome for the debtor and his creditors. Under the scheme, the debtor will be required to repay as much as possible through the realization of his assets and adjustment to his lifestyle. Creditors will receive not less than what they would have otherwise received had the debtor gone into bankruptcy. The debtor will be able to avoid the stigma of bankruptcy and have a fresh start. Since he is not made a bankrupt, the disqualification and disabilities of a bankrupt would also not be applicable.
The DRS will apply to wage-earner debtors with relatively small unsecured debts of less than $100,000. For a start, to keep the Scheme simple, the DRS will not be available to those in businesses and partnerships.
Unlike bankruptcy proceedings, the DRS is not a court-based process but will be administered by appointed and qualified case Administrators from IPTO.
A debtor will be given the opportunity to propose a debt repayment plan, which has to be completed within 5 years, under the supervision of an Administrator. The Administrator will ensure that the interests of creditors are not compromised, that is, creditors will receive no less than if the debtor had gone into bankruptcy.
Once the repayment plan is approved by the Administrator, the debtor will proceed to implement the plan. Upon completion of the plan, the debtor will be released from his debts under the DRS. However, if the debtor is dishonest or fails to cooperate with the Administrator, the Administrator can declare that the plan has failed and any creditor may proceed to make the debtor a bankrupt.
The DRS will also place emphasis on debtor rehabilitation and the inculcation of financial responsibility in debtors to avoid future financial embarrassment.
Public Consultation Exercise
- The Ministry of Law and IPTO will hold a public consultation on the proposed DRS. The public will have from 23 April 2007 to 1 June 2007 to review and comment on the proposed scheme. The feedback given will be taken into consideration in finalising the DRS. A second public consultation will be conducted subsequently on the draft legislation to enact the scheme.
- The public consultation paper (see Annex I) can be viewed at IPTO’s website https://io.mlaw.gov.sg/. The paper is also accessible through the Ministry of Law’s website www.mlaw.gov.sg or the Government Consultation Portal - REACH’s website at www.reach.gov.sg.
- All feedback should be submitted via email by 1 June 2007 to IPTO_drsfeedback@ipto.gov.sg or by mail to:
Attn: Ms Beverly Wee
Debt Repayment Scheme Feedback
Insolvency & Public Trustee's Office
The URA Centre East Wing
45 Maxwell Road, #06-11
Last updated on 26 Jan 2013