Short answer: The Debt Repayment Scheme (DRS) lets an individual whose total debts do not exceed S$150,000 avoid bankruptcy by repaying creditors under a plan of up to five years supervised by the Official Assignee. You cannot apply directly; a bankruptcy application must come first. Company directors are not excluded, but a called bank guarantee often exceeds the ceiling.
When a company’s bank facility goes bad, the bank usually turns to the director who signed the personal guarantee. If you cannot pay, the debt repayment scheme in Singapore is the main statutory alternative to bankruptcy for an individual with modest debts. This guide covers who qualifies, how a bankruptcy application is referred into the scheme, what the Official Assignee does, what it means for your directorships, and whether the Ministry of Law’s announced changes are law yet (as at 25 October 2026, they are not).
Key facts at a glance
- Debt ceiling: total debts must not exceed S$150,000 (section 289(2)(a), Insolvency, Restructuring and Dissolution Act 2018 (IRDA), read with regulation 4(1) of the IRD (Debt Repayment Scheme) Regulations 2020).
- Entry route: the High Court adjourns a bankruptcy application for 6 months, or such other period as it directs, and refers the matter to the Official Assignee (sections 316(9) and 318(3) IRDA).
- Repayment period: a debt repayment plan cannot exceed 5 years (section 291(7) IRDA).
- Excluded: sole proprietors, partners of firms and LLP partners, and anyone who was bankrupt, on the DRS or under a voluntary arrangement in the previous 5 years (section 316(9)(b) to (e) IRDA).
- Official fees: S$350 plus S$250 before the plan starts, then S$300 a year for the first 2 years and S$350 a year for the next 3 years (Insolvency Office fee table).
- Reforms: consultation ran from 9 to 27 June 2025 and the Ministry of Law responded on 20 January 2026. As at 25 October 2026 no amending Bill has been published, so the current rules apply.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
What is the Debt Repayment Scheme and what is its legal basis?
The DRS is a court-referred, debtor-driven scheme in which an individual repays creditors from income under a plan approved by the Official Assignee (OA), instead of being made bankrupt. It sits in Part 15 of the IRDA (sections 288 to 303), with the detail in the Debt Repayment Scheme Regulations 2020 and the Official Assignee’s Fees Regulations 2020.
A “debt” for this purpose is an unsecured, present and certain liability of a fixed or liquidated amount (section 288(1)). The Ministry of Law describes it as intended for wage-earning debtors with relatively small debts. Bankruptcy procedure is governed by the IRDA and the Personal Insolvency Rules 2020, rather than a specific Order of the Rules of Court 2021.
Once a plan commences, creditors with debts provable under the scheme cannot pursue you, your property or proceedings against you without the court’s permission (section 293(1)). Secured creditors keep their right to enforce their security (section 293(2)), so a mortgage over your home is not frozen. Per the Insolvency Office, interest on creditors’ claims stops on the day you start the scheme.
Who is eligible for the Debt Repayment Scheme in Singapore?
You must meet all five eligibility criteria published by the Insolvency Office, and then pass the OA’s suitability assessment. Failing any criterion ends the assessment and the bankruptcy application goes back to court.
| Criterion | Legal basis | What it means for an owner-director |
|---|---|---|
| Total debts not more than S$150,000 | s 289(2)(a) IRDA; reg 4(1) DRS Regulations 2020 | A called guarantee counts towards the ceiling. Guarantees of bank facilities often exceed it on their own. |
| Gainfully employed with a regular income | Insolvency Office eligibility criteria | A salary drawn from your own struggling company may be questioned on whether it will continue. |
| No bankruptcy or DRS in the last 5 years | s 316(9)(b) and (d) IRDA | A second attempt within 5 years is not possible. |
| No voluntary arrangement in the last 5 years | s 316(9)(c) IRDA | A Part 14 arrangement with personal creditors in that period disqualifies you. |
| Not a sole proprietor, partner of a firm or LLP partner | s 316(9)(e) IRDA | Directors and shareholders of a private limited company are not on this list. |
The practical hurdle for most owner-directors is the S$150,000 ceiling. Once a guarantee is called, the full liquidated sum is part of your total debts. If you are unsure what your guarantee covers, see our guide to personal guarantee liability when the company defaults, and if the bank has recalled the company’s facility, our article on a bank loan recall on a Singapore company.
How does a bankruptcy application get referred to the DRS?
A guarantee call becomes a DRS case only if a bankruptcy application is filed in the High Court, either by the bank as creditor or by you as debtor. There is no direct application form for the DRS, and the Insolvency Office states that the OA has not appointed any agent to file bankruptcy applications.
A creditor may file only for a liquidated debt of at least S$15,000 that you are unable to pay (section 311(1) IRDA). You are presumed unable to pay if a statutory demand was served, at least 21 days have passed, and you have neither complied nor applied to set it aside (section 312(a)). The deadlines for a guarantor are covered in our article on a statutory demand served on a personal guarantor; if you have received one, speak to a lawyer promptly.
At the hearing, if a bankruptcy order could otherwise be made and all the qualifying criteria are met, the court must adjourn the application instead of making the order and refer the matter to the OA (section 316(9) for creditor applications, section 318(3) for debtor applications). If a scheme commences during the adjournment, the bankruptcy application is deemed withdrawn (section 316(11)). If you are found unsuitable, the court hears the application again; what follows a bankruptcy order is covered in our guide to bankruptcy for business owners.
What does the Official Assignee do, step by step?
The OA reviews your suitability, collects your financial information, consults creditors, approves a plan and then administers it to completion (sections 289(1) and 292(2)). The main stages are:
- Referral: the court adjourns the bankruptcy application and refers the matter to the OA under section 316(9) or 318(3).
- Notice and introductory video: the Insolvency Office tells you to view the DRS introductory video and file your documents online. You are given 14 days to do both.
- Online submission: you file a Statement of Affairs, an Income and Expenditure Statement, a proposed Debt Repayment Plan and supporting documents (section 290(1)). The preliminary fees of S$350 and S$250 are due at submission.
- Proofs of debt: the OA sends a notice to every creditor disclosed in your Statement of Affairs, requiring a proof of debt within the time it specifies (section 290(2)).
- Creditors’ meeting: the OA convenes and presides at a meeting to review the plan (section 291(2)). Attendance is compulsory, and the Insolvency Office says you will be told the outcome within 7 days.
- Approval: the OA may approve the plan with or without modifications (section 291(3)). You or a creditor who has proved a debt may appeal to the DRS Appeal Panel on the ground of unfair prejudice (section 291(4)).
- Commencement: after you pay the first annual fee of S$300 and the first monthly instalment, the plan takes effect and the scheme commences (sections 291(8) and 292(1)).
- Completion: once you have repaid the proved debts included in the plan, the OA must issue a certificate of completion (section 301(1)).
What documents, fees and timeline should you expect?
Complete, consistent documents matter most. The fees below are those listed by the Insolvency Office under the Official Assignee’s Fees Regulations 2020.
| Item | Amount, content or timing | When |
|---|---|---|
| Statement of Affairs | All assets, debts and creditors, including guarantee claims and loans from relatives | Online submission |
| Income and Expenditure Statement | Salary, bonuses, household expenses and dependants | Online submission, updated during the plan |
| Proposed Debt Repayment Plan | Monthly instalments over not more than 5 years | Online submission |
| Supporting documents | For example salary slips, CPF statements and Notice of Assessment | Online submission and on request |
| Preliminary administration fee | S$350 | At submission |
| Suitability review fee | S$250 | At submission |
| Annual administration fee | S$300 a year (first 2 years); S$350 a year (next 3 years) | Start of each year of administration |
| Collection and distribution fees | 1.5% of amounts collected; 3% of amounts distributed | Throughout the plan |
| Appeal fee / plan modification fee | S$100 / S$50 | If an appeal or modification is made |
Beyond these official fees, your total cost depends mainly on whether you instruct a solicitor for the guarantee dispute and the bankruptcy hearing, how complex your affairs are, and whether creditors dispute the figures.
Can you remain a company director while on the DRS?
Yes. A person on the DRS is not an undischarged bankrupt, so the bar in section 148 of the Companies Act 1967 does not apply, and Part 15 of the IRDA does not prohibit acting as a company director. The scheme’s business restriction targets unincorporated businesses: becoming a sole proprietor, partner or LLP partner during the scheme without the OA’s consent is a ground for a certificate of failure (section 300(1)(l)).
The position changes sharply if the plan fails. After a certificate of failure, creditors may pursue bankruptcy again. An undischarged bankrupt who acts as a director, or takes part in managing any corporation, without the permission of the court or the written permission of the OA commits an offence punishable by a fine of up to S$10,000, imprisonment of up to 2 years, or both (section 148(1)).
Owner-directors on the DRS should watch three failure grounds in particular:
- Signing for new credit: incurring a debt of more than S$1,000 after the scheme starts without telling the lender you are on the DRS (section 300(1)(g)). A fresh personal guarantee for a company facility can fall within this.
- Paying favoured creditors: an unfair preference to an associate from 2 years, or to anyone else from 1 year, before the bankruptcy application until the scheme is completed (section 300(1)(i)).
- Transfers at an undervalue: gifts or cheap transfers, such as moving shares or property to a spouse, from 3 years before the application until completion (section 300(1)(h)).
For the company side, our guide to directors’ duties near insolvency explains what the board must consider when the company itself is struggling.
What happens when the DRS ends, and does it release co-guarantors?
A completed plan releases you from the debts provable under the scheme, except a debt you failed to disclose and for which no proof of debt was filed (section 301(2)). It does not release anyone else. Section 301(3) applies section 397(2) to (8), so debts due to the Government are not released, and the release does not free any other person liable for the same debt, such as a fellow director who co-signed the guarantee (section 397(7)).
The OA may revoke a certificate of completion if you did not disclose all your property or obtained the plan by fraud, false representation or concealment of a material fact (section 302). If the plan fails instead, creditors can return to court for a bankruptcy order.
What changes to the DRS has the Ministry of Law announced, and are they law?
They are not law. The Ministry of Law consulted from 9 to 27 June 2025 and, in its response of 20 January 2026, said it would incorporate the feedback, where applicable, in an upcoming Insolvency, Restructuring and Dissolution (Amendment) Bill. The main proposals are:
| Proposal | Detail from the consultation and response | Relevance to owner-directors |
|---|---|---|
| New offence of soliciting bankruptcy applications | Soliciting or canvassing any person, in the course of business, to make a bankruptcy application. Proposed penalty of a S$10,000 fine or 3 years’ imprisonment or both; the Ministry is considering a maximum fine of S$30,000. Regulated professionals, institutions of a public character and selected social service agencies would be exempt. | Treat paid “debt consultancy” pitches promising large DRS discounts with caution. |
| Two new grounds of unsuitability | Not paying the preliminary fees by the time the OA specifies; and incurring a debt, within 12 months before the bankruptcy application or before the DRS starts, without a reasonable ground of expectation of repaying it. | Borrowing personally to keep the company afloat shortly before a bankruptcy application could be examined. |
| New ground of failure | The same reasonable-expectation ground if discovered after the plan starts (section 300(1)), not applying to bankruptcy applications filed before the amendment takes effect. | Full disclosure at the start matters even more. |
| Four-week deadline for proofs of debt | Creditors would have 4 weeks from the OA’s notice, with extensions only for reasonable justification. A creditor who misses it without justification would lose the claim once a certificate of completion issues. | Faster, more certain assessment of whether you are under S$150,000. |
The Ministry will keep the 5-year maximum and will look into an offence for false or misleading business communications about the DRS. It also proposed procedural changes to the Appeal Panel.
On 25 October 2026 the current version of the IRDA on Singapore Statutes Online contains none of these changes, its legislative history lists no DRS amending Act, and the 2026 Bills Supplement lists no Insolvency, Restructuring and Dissolution (Amendment) Bill. The S$150,000 ceiling, eligibility criteria and failure grounds above are therefore the law today. Before relying on any change, check for a Bill and its commencement date; the consultation paper already signals transitional rules.
What does the company secretary prepare, and what does the solicitor do?
The DRS is a personal insolvency process: the solicitor and the Insolvency Office handle the bankruptcy application and the plan, while the company secretary keeps the company’s own records accurate. Court proceedings, including bankruptcy hearings, are conducted by a Singapore Advocate and Solicitor.
- Your solicitor: advises on the guarantee claim and any defence, appears at the bankruptcy hearing, and advises on alternatives such as a voluntary arrangement under Part 14 of the IRDA.
- The company secretary or corporate service provider: prepares board minutes approving restructuring talks with the bank, keeps the registers and ACRA filings up to date, and lodges any change of officers if a director steps down or a new director is appointed.
Our free tools help track the company’s filing dates meanwhile.
What are the common mistakes owner-directors make?
- Assuming the DRS is available when the guarantee alone takes total debts above S$150,000.
- Paying a consultancy, sometimes with borrowed money, to self-petition for bankruptcy in the hope of a DRS discount.
- Leaving guarantee claims, director’s loans or debts to relatives out of the Statement of Affairs.
- Assuming a completed plan also clears a co-director who signed the same guarantee.
- Missing the 14-day online submission window or the compulsory creditors’ meeting, which sends the case back to court.
Frequently asked questions
Can I apply for the Debt Repayment Scheme myself?
Not directly. You or a creditor must file a bankruptcy application in the High Court, and the court refers the matter to the Official Assignee if the qualifying criteria are met. The Official Assignee then decides whether you are suitable.
Does a personal guarantee count towards the S$150,000 limit?
Yes, once called and quantified it is an unsecured liability that counts towards your total debts, so a large bank guarantee can take you out of the scheme.
Will I be removed as a director if I go on the DRS?
No. The DRS is not bankruptcy, and section 148 of the Companies Act 1967 applies only to undischarged bankrupts. If the plan fails and you are later made bankrupt, you must stop acting as a director unless the court or the Official Assignee gives permission.
Are the announced DRS changes in force?
No. As at 25 October 2026 no amending Bill has been published and the IRDA does not contain the changes. They will apply only after Parliament passes a Bill and it commences.
Need help with this?
Raffles Corporate Services can handle the ACRA filings, compliance documentation and records for you, and where court proceedings or legal advice are needed, we work with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice.
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Last reviewed: 25 October 2026. The Editorial Team, Raffles Corporate Services.