Debt Repayment Scheme: How Does It Work in Singapore?

Key Takeaways

• The Debt Repayment Scheme (DRS) in Singapore is a pre-bankruptcy programme administered by the Official Assignee (OA) of the Ministry of Law’s Insolvency Office that helps eligible individuals avoid bankruptcy.
• Unlike a Debt Consolidation Plan (DCP), Singapore’s DRS cannot be applied for voluntarily and is only considered after bankruptcy has been filed.
• All eligible unsecured debts are consolidated into a single repayment plan of up to five years, with interest accumulation frozen.
• While the DRS offers legal protection from creditors, it also comes with a loss of financial autonomy during the repayment period.

Due to the high cost of living, many Singaporeans may find themselves trapped in mounting financial liabilities involving credit card balances, personal loans, and other lifestyle debts. When repayments start piling up, and cash flow tightens, debt can quickly spiral out of control — sometimes to the point where bankruptcy becomes a real risk.

This is where the Debt Repayment Scheme (DRS) comes in.

What is DRS? Often described as a final lifeline for debtors, the DRS is a pre-bankruptcy programme designed to help individuals avoid bankruptcy by enabling them to repay their debts in a structured and manageable way. It is administered by the Official Assignee (OA) under the Ministry of Law’s Insolvency Office and offers protection from creditor legal action while you work towards becoming debt-free.

How to apply for DRS in Singapore? Unlike a Debt Consolidation Plan (DCP), the DRS is not open for application directly. This option is available only to individuals who have either filed for bankruptcy or have had bankruptcy proceedings initiated against them in the High Court by their lenders or creditors.

In this article, we’ll go over everything you need to know about DRS, including how it works, how it compares to DCP, the pros and cons of the debt repayment scheme, and more.

How the Debt Repayment Scheme works

Once a bankruptcy application has been filed against you by your creditor or yourself, an OA from the Ministry of Law will assess whether you qualify for the debt repayment scheme. To be eligible, you must meet the following criteria (you won’t qualify for DRS if you fail to meet any of the requirements):

• Total liabilities cannot be more than S$150,000;
• Gainfully employed and receive a regular income;
• Haven’t declared bankruptcy or been on the DRS in the previous five years;
• Haven’t participated in a court-based arrangement in the previous 5 years; and
• Are not a sole proprietor or partner member in any company.

If you meet the criteria, the OA will then assess your suitability for the DRS. You’ll be required to submit relevant documents online detailing your income, expenditure, financial affairs, and your suggested debt repayment plan strategy to your lenders and creditors (see paperwork needed for DRS below). This allows the OA to determine whether you can realistically repay your debts under the scheme.

If deemed suitable, the OA will formulate a Debt Repayment Plan (DRP). This plan sets out your monthly instalment amount, repayment duration (up to 5 years), and the terms and conditions of the repayment. You must then start paying off your debts through the OA, which will manage your finances during the duration. Your monthly instalments depend on your income and the total debt owed.

If you do not qualify, bankruptcy proceedings will continue.

Once placed under the DRS, all eligible unsecured debts are consolidated, and interest on these debts stops accruing. During this period, creditors cannot commence or continue legal action against you. Get more information for debtors about the DRS here.

According to data from the Ministry of Law, the number of cases commencing on the DRS increased considerably from 2024 to 2025, from 2,026 to 2,639, highlighting growing financial strain among consumers.

Advantages and disadvantages of DRS

Here’s a quick overview of the advantages and disadvantages of the debt repayment scheme:

Advantages of the debt repayment scheme

• Avoids bankruptcy and its long-term consequences
• No negative stigma associated with being a bankrupt
• No restrictions on overseas travel
• You can still open and maintain a bank account
• No listing on the public bankruptcy register
• Legal protection from creditors during the repayment period

Disadvantages of the debt repayment scheme

On the other hand, there are also disadvantages to the debt repayment scheme:

• The DRS lasts up to five years, requiring long-term commitment
• You cannot apply for it voluntarily, as it’s only initiated once a bankruptcy proceeding has been commenced against you, either by yourself or by your creditors
• Loss of financial autonomy, as the OA oversees your finances
• Failure to comply may result in bankruptcy

Debt Repayment Scheme fees and charges

There are several DRS payment fees to be aware of, including an admin fee and an assessment fee. Refer to the table below for more details.

Paperwork needed for DRS

When applying for DRS, you’ll need to submit various forms and paperwork for the OA to evaluate your suitability. These are:

1. Statement of Affairs;
2. Income and Expenditure Statement;
3. Debt Repayment Plan; and
4. Supporting documents in accordance with the Annex B administration form

You have a maximum of 14 days to watch the introductory video and complete the online submission. If you do not complete these tasks, your case will be sent back to the Court for a renewed bankruptcy hearing.

Termination of DRS

Your DRS will be terminated under one of these circumstances:

1. Certification of Completion — issued by the OA once you’ve successfully repaid your debts.
2. Certificate of Failure — issued by the OA if you fail to comply with the DRP without legitimate reasons, such as job loss or a significant drop in income. Once this happens, your DRS will be terminated, and creditors may commence fresh bankruptcy proceedings against you.
3. Certificate of Inapplicability — your certificate can also cease if your liabilities accumulate beyond S$150,000 after the commencement of the Debt Repayment Plan or if you pass on.

Debt Repayment Scheme vs Debt Consolidation Plan

If you’re struggling with several high-interest unsecured loans and aren’t ready to be declared bankrupt yet, another option to consider is a Debt Consolidation Plan (DCP).

A DCP allows you to consolidate multiple unsecured debts into one loan, usually with a lower interest rate and better loan terms. Unlike the DRS, you can apply for a DCP directly through participating banks and financial institutions if you meet the criteria.

Since you only repay one lender, this makes it easier to keep track of payments as you don’t have to juggle between payment dates, instalment amounts, interest rates, and fees from different loans.

Here’s an overview of the differences between a DRS and a DCP.

Conclusion

The DRS provides a structured and supervised way for individuals to avoid bankruptcy while settling their debts. While it offers legal protection and interest relief, it also comes with strict conditions and limited financial freedom.

Importantly, the DRS is not the only way out of debt. For many individuals with indebtedness, a debt consolidation loan from a licensed lender may help you regain control sooner — without waiting for bankruptcy proceedings or such extreme accumulation of debt.

You may also consider other debt settlement options in Singapore, including the aforementioned DCP, the Debt Management Programme (DMP), and the Moneylender Debt Management Programme (MDMP), if suitable for your circumstances.

Exploring personal loan options to manage your debts before things escalate? Compare private personal loans from banks and legal lenders on Personal Loan Finder now. Feel free to contact us if you need assistance with your online application or any other loan-related matter.