The Debt Repayment Scheme (DRS) is a legal program in Singapore that helps people who are in financial trouble avoid bankruptcy. Instead of having all your assets taken and sold under bankruptcy, the DRS allows you to repay your debts over a set period (usually up to five years) while keeping your legal status as a non-bankrupt.
The program is managed by the Official Assignee (OA) from the Ministry of Law’s Insolvency Office. If accepted, you’ll have a fixed payment plan that covers your unsecured debts.
However, not everyone can join this scheme. The eligibility rules are strict, and you can’t apply directly without a court process.
Debt Repayment Scheme Eligibility Rules
| Eligibility Criteria | Meaning | Importance |
|---|---|---|
| Debt amount | Total unsecured debts must not be more than S$150,000 | If you cross this limit, you won’t qualify |
| Type of debt | Must be unsecured debt (e.g., credit cards, personal loans) | Secured debts like mortgages are not covered |
| Income stability | You need a steady income to meet regular monthly repayments | Without income, the OA won’t approve your plan |
| Court referral | You only enter DRS if a court refers you after a bankruptcy application | There is no walk-in or online DRS application |
| Residency status | Usually for Singapore citizens and permanent residents | Foreigners may be considered if they meet other rules |
| No recent bankruptcy discharge | You should not be recently discharged from bankruptcy | This ensures DRS is for genuine first-time repayment help |
How Can You Enter in DRS?
Many people mistakenly think they can apply directly for the Debt Repayment Scheme. This is not the case. Here’s how it actually works:
- A bankruptcy application is filed- This can be done by you (debtor) or by a creditor.
- Court review- The court looks at your case and debt amount.
- Possible DRS referral- If your unsecured debts are within the S$150,000 cap and you meet other conditions, the court refers you to the Official Assignee.
- OA assessment- The OA checks your income, debts, and ability to repay.
- DRS plan creation- If approved, a repayment plan (up to 5 years) is set up.
- Plan monitoring- You make monthly payments as agreed until the plan ends.
Limits of the Debt Cap
The S$150,000 limit is one of the most important eligibility rules. Here’s a breakdown:
| Included in the Limit | Excluded |
|---|---|
| Credit card debt | Housing loans |
| Personal loans | Car loans |
| Renovation loans (unsecured) | Business loans secured against assets |
| Overdrafts | Loans with property/asset security |
If your total unsecured debt is S$150,001 or higher, the OA will issue a Certificate of Inapplicability, meaning you cannot use DRS.
Income Threshold for DRS Eligibility
Even if your debts are within the limit, the OA will still check if you have regular income. This could be from:
- Full-time employment
- Part-time work with steady hours
- Self-employment with consistent earnings
- Pension or long-term allowances
If your income is irregular or too low to cover the proposed repayment amount, your application for DRS will fail.
Who are Eligible for DRS
People who often meet the criteria include:
- Salaried employees with debts from credit cards and personal loans
- Self-employed individuals with a few years of consistent income records
- Those whose total unsecured debts are below S$150,000 and have not been declared bankrupt before
Step to Check Your DRS EligibIlity
- Add Up Your Unsecured Debts- Make sure the total is S$150,000 or less.
- Check Debt Type- Remove secured debts from the calculation.
- Assess Your Income- Ensure you have stable monthly income to meet the repayment plan.
- Consider Your Legal Status- Be aware that you must enter through a court referral.
- Prepare Documents- Have your payslips, loan statements, and NRIC ready for verification.
People Also Like: Debt Repayment Eligibility Calculator
Common Reasons People Don’t Qualify For DRS
- Debt total above the cap- Even a small amount over S$150,000 disqualifies you.
- Unstable job history- Inconsistent earnings make it hard to commit to repayment.
- High secured debts- If your main debt is a mortgage or car loan, DRS won’t cover it.
- Not reaching court stage- Without a bankruptcy case in court, DRS cannot be offered.
FAQs
Q1: Can I apply for DRS online?
A: No, DRS is only available through a court referral after a bankruptcy application.
Q2: What happens if I qualify?
A: The OA will create a repayment plan based on your income and debt amount, lasting up to 5 years.
Q3: Will DRS cover my housing loan?
A: No, DRS is for unsecured debts only.
Q4: Can I travel while on DRS?
A: Yes, DRS does not have the travel restrictions that bankruptcy has.
Q5: Can foreigners qualify for DRS?
A: In most cases, it’s designed for Singapore citizens and PRs, but foreigners with local debt and court cases may be considered.
The Debt Repayment Scheme can be a lifeline for people with manageable unsecured debts who want to avoid the heavy consequences of bankruptcy. But it’s not open to everyone, the S$150,000 debt cap, steady income requirement, and court referral process mean you must fit very specific conditions.
If you don’t meet the rules, it’s worth exploring alternatives like a Debt Management Plan (DMP) or Debt Consolidation Plan (DCP), which have different entry requirements.
