Debt Repayment Scheme in Singapore : How It Works
If you’re reading this, you might be feeling overwhelmed by debt — juggling monthly payments, dealing with rising interest, and wondering when things will finally get better. The good news is: you’re not alone, and there is help available.
One of the most effective debt solutions for Singaporeans today is the Debt Repayment Scheme (DRS).
In this guide, we break down everything you need to know about DRS in a simple, relatable, and hopeful way.
What Is the Debt Repayment Scheme (DRS)?
The Debt Repayment Scheme (DRS) is a government-initiated debt consolidation program managed by the Insolvency Office of the Ministry of Law.
It is designed to help individuals who are struggling with unsecured debt but want to avoid bankruptcy.
Think of DRS as a structured, affordable, single-plan repayment program that gives you:
Lower and manageable monthly instalments
A fixed 3–5 year repayment window
Protection from legal actions from creditors
A clear path to becoming debt-free without being declared bankrupt
Who Is Eligible for the DRS?
You may qualify for DRS if you meet these criteria:
Your total unsecured debt is less than $150,000
You have a regular income
You are not an undischarged bankrupt
The Official Assignee (OA) assesses that you can realistically repay your debts over time
Common unsecured debts that qualify include:
credit cards,
personal loans,
credit lines,
renovation loans,
medical bills,
and other non-secured obligations.
How Does the DRS Process Work?
The process is simpler than most people expect:
1. You receive a DRS assessment after filing a bankruptcy application
Sometimes, when someone files for bankruptcy because they can’t pay their debts, the OA may redirect the case to DRS instead of bankruptcy, if eligible.
2. The OA evaluates your income, expenses, and total debt
This helps determine a fair and affordable monthly repayment amount.
3. A DRS proposal is created
This outlines:
Your repayment plan
Your monthly instalments
How your debt will be repaid over the next 3–5 years
4. Creditors vote
If creditors do not object, the plan is approved.
5. You begin your repayment plan and stay protected
As long as you follow the repayment plan:
Interest stops accumulating
Creditors cannot sue you
You stay out of bankruptcy
6. You complete the plan and become debt-free
After faithfully completing the repayment term, you are officially discharged from the scheme — with a clean, fresh start.
Benefits of the Debt Repayment Scheme (DRS)
✔ Lower Monthly Payments
The OA will ensure your repayment amount is realistic and allows you to maintain day-to-day living.
✔ Interest Freeze
All interest and late charges stop once your DRS begins.
You only repay the principal debt — nothing more.
✔ Avoid Bankruptcy
Being placed on DRS helps you avoid the long-lasting consequences of bankruptcy such as restrictions on travel, business, and credit access.
✔ Legal Protection From Creditors
DRS shields you from:
Lawsuits
Harassment
Wage garnishment
Asset seizure
✔ A Clear Path to Freedom
DRS sets a fixed timeline — typically 3 to 5 years — allowing you to work towards a guaranteed debt-free life.
Is DRS Better Than Bankruptcy?
In most cases, yes — if you are eligible.
Debt Repayment SchemeBankruptcyKeep your assetsPossible asset seizureInterest freezeInterest may continueNo travel restrictionsTravel approval neededNo public stigmaName on bankruptcy register3–5 years fixedIndefinite until discharge
DRS is created to give people a fair chance to recover, without the weight of bankruptcy affecting their future.
Who Is the DRS Most Suitable For?
You may find DRS helpful if:
You earn a steady income
You are falling behind on credit card or loan payments
You want to avoid bankruptcy
You need protection from creditors
You want a structured plan to repay debt in a realistic timeline
Many Singaporeans who choose DRS say it gives them something they haven’t felt in years: relief and clarity.
Common Misconceptions About DRS
“Only bankrupt people go into DRS.”
False. DRS is specifically designed to avoid bankruptcy.
“My creditors will never agree.”
Most creditors prefer DRS because they recover more money compared to bankruptcy.
“I won’t be allowed to use any money.”
No — the OA ensures your monthly budget is realistic and allows you to maintain normal living expenses.
“This will ruin my future.”
Actually, DRS helps restore your financial future by giving you a structured path to repay your debt without severe penalties.
How Do I Know if DRS Is Right for Me?
If you’re:
Using more than 50–60% of your income to pay debts
Missing payments
Struggling with high interest
Feeling mentally exhausted and cornered
…then DRS may be the structured solution that gives you breathing space.
Final Thoughts: You Deserve a Fresh Start
Debt can feel heavy — like a weight you carry everywhere.
But with the right guidance and the right scheme, you can regain control.
The Debt Repayment Scheme is not just a legal program.
It is a second chance for everyday Singaporeans to rebuild stability, confidence, and peace of mind.
If you are unsure whether you qualify or want to explore your options, professional guidance can help you understand your next best step.
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