Singapore does not have a specific legal framework regarding how debt collection proceedings should be handled because the city-state has a good DSO (Days Sales Outstanding). Singapore has a good payment culture, late payments being registered rarely. The only legislation referring to companies in Singapore with late payments is the Insolvency Law. According to the Insolvency Law, most debt proceedings are conducted in Court.
The first step towards debt recovery in Singapore is an amicable settlement between parties. If that fails, before starting legal proceedings, an assessment of the company’s assets is important and verification with the Singapore Companies Register is also useful in order to check the company’s activity. It is also very important to verify the debtor’s solvency status because if an insolvency procedure has commenced debt recovery is no longer possible. If debt collection is possible the first step would be to notify the debtor about the outstanding amount by sending out dunning letters. If the debtor does not respond to the dunning letter, a collection officer may visit the debtor for an amicable settlement.
Our attorneys in Singapore can provide legal counseling in debt collection procedures.
Singapore’s legal system is comprised of State Courts that comprises the Magistrate Court and District Courts and the Supreme Courts that is made up of the High Court and the Court of Appeal. When it comes to debt recovery proceedings, the court judging the case will depend on the amount of money to be recovered. For debts not exceeding 10,000 S$ the plaintiff may file a petition with the Small Claim Tribunal. Civil cases with debts that do not exceed 60,000 S$ are handled by the Magistrate Court, while cases in which the debt ranges between 60,000 S$ and 250,000 S$ will be handled by District Courts. The High Court will rule in cases where the amount to be recovered exceeds 250,000 S$. The first step to recover a debt will be sending a demand letter for the debtor to pay the outstanding amount and the late payment interests. The creditor will file a writ of summons the court will serve to the debtor. The debtor will then have from 8 to 14 days to file a defense. Based on that the court will examine both parties’ evidence and makes a decision.
You can contact our law firm in Singapore for legal representation in litigation cases or debt recovery proceedings.
There are no comments