Starting a Company in Singapore – Step-by-Step Guide

Overview Of Debt Recovery In Singapore

There are three general steps in the debt recovery process. They include finding more information about the debtor, obtaining a court judgement and enforcing the judgement if the debtor fails to pay up.

Finding Information about the Debtor

To increase your chances of recovering your debt, you should gather information regarding your debtor.

Firstly, you should know who to claim your debt from if you wish to start legal proceedings.

If the debtor is a person and the amount owed to you is at least $15,000, bankruptcy proceedings may be an option. If so, their assets (most property belonging to them) will be put into a bankruptcy estate which will be sold to pay off their debts to creditors like you.

On the contrary, if your debtor is a company, you should find out information such as if you have a personal guarantee (an agreement whereby if the debtor or business is unable to repay the debt, you are responsible for repaying it with your assets) and who the company’s directors are.

Secondly, you should find out what assets the debtor has in Singapore. After all, legal proceedings are pointless if the debtor simply has no money. In this case, negotiating a payment plan may be more cost-effective than beginning a legal process to recover your debt.

In other cases, our lawyer will assist you in conducting checks on the debtor, such as finding out the company or person’s financial circumstances, if they have assets available for attachment or any sources of income.

Obtaining a Court Judgement

If the debt owed is up to $20,000, you should file a claim with the Small Claims Tribunals (SCT). Take note that you do not need to hire a lawyer to file a claim with the SCT.

However, there are limitations including:

• The limit on the claim amount is $20,000 unless there is the consent of both parties to raise the limit to $30,000.
• The SCT does not hear all kinds of cases. For instance, disputes involving employment, insurance or loans will not be heard.
• The SCT will not hear the claim if the cause of action occurred more than 2 years ago.

If you are owed more than $20,000 or if your claim does not fall under the jurisdiction of the SCT, you will need to file a civil claim with the State Courts. This follows the normal civil litigation process. In such cases, it is advisable to get a lawyer. A lawyer will usually profile your debtor to determine your chances of getting your money back and propose the best strategy.

Before filing the claim, your lawyer will send a letter of demand requiring the other party to comply with your demands or risk a lawsuit. Your lawyer may advise commencing legal proceedings if the requests have not been complied with.

Enforcing the Judgement

If your debtor does not pay up even after obtaining a court judgement, the next step will be enforcement proceedings.

Your lawyer will discuss the different options of enforcing the court judgement with you. One of the more common enforcement options is by Writ of Seizure and Sale (authorises a bailiff to seize and sell movable property belonging to the debtor to pay the debt).

Why Should You Choose A Law Firm?

1. Lawyers can give you a practical assessment of your case

Obtaining a practical assessment of your case is extremely important as it will help decide your course of action in recovering your debt.

The usual mode of debt recovery is to send the debtor a letter of demand, followed by a Writ of Summons if the debtor does not pay up, and then obtain a court judgement to be enforced on the debtor. However, the strategy for debt recovery varies depending on the details of each case.

One of the foremost considerations in debt recovery is deciding if the debt is even worth recovering. This is done by measuring the amount of returns you will get relative to the costs of obtaining that return. If, for instance, commencing legal proceedings incurs a cost that exceeds the amount of debt you are claiming, it may not be wise to proceed with this course of action.

A debt recovery lawyer will help run you through the relevant considerations and options and advise on the best course of action for your particular case.

2. Your money will be accounted for

Law firms in Singapore are subjected to oversight by the Law Society of Singapore. Hence, unlike debt collection agencies, we are bound by strict rules of professional conduct.

Therefore, you can be rest assured that the money collected from the debtor on your behalf will be properly accounted for, and there will be no disparity between the amount paid by the debtor to our firm and the amount reported to you by us.

3. Hiring a debt collector can be risky

It is important to hire a reliable party to help you recover your debt.

You should be aware of certain risks associated with hiring debt collectors. While there are no specific laws regulating debt collectors, certain acts carried out by debt collectors to recover a client’s debt may be against the law.

If the debt collectors were to run into trouble with the law, it might delay the process of you recovering your debt. Additionally, you face the possibility of incurring liability for hiring the agency in the event you are sued for the agency’s acts. This is usually the case unless the debt collection agency has taken out Errors and Omissions Insurance to indemnify you. You should take note to verify this if you are considering hiring a debt collector.

4. Better transparency in fees

Our law firm has a fee structure that is straightforward and transparent, with a fixed fee for each stage of the debt recovery process. This way, you as a client can be assured that there will be no hidden charges and can make an informed decision on whether you would like to proceed with us.

On the other hand, debt collectors usually charge on a percentage basis of the debt to be collected. Some agencies also charge a significantly higher commission rate for older debts, while others seek payment upfront. Occasionally, some debt collectors even disappear after receiving payment, resulting in little to none of the debts being recovered.

Contact us to find out more about our fee structure.

5. Better settlement results

Hiring a law firm for debt recovery also helps increase your chances of getting a better settlement. This is mainly because law firms have vast experience carrying out trials.

At PDLegal LLC, our lawyers are highly qualified and adept at debt recovery proceedings, helping our clients recover debts in a timely and cost-effective manner.

Consult us to find out more.

6. Lawyers will preserve your case for an appeal

Keep in mind that you may lose the case if you choose to represent yourself in court. This is because judges can make mistakes in their judgements. If and when this happens, you will probably want to appeal the judgement. Hiring a lawyer will ensure that your case is preserved for an appeal if you get an adverse ruling from the judge.

Conclusion

By now, you should have a better understanding of what hiring a debt recovery lawyer or debt collector entails. Debt recovery is not an easy process. Hence it is essential to carefully assess your options if you want a smooth and efficient recovery process.

Feel free to contact us if you have any queries, as we are more than happy to assist you.