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Here’s What You Can Do Legally As Recourse If A Company Owes You Money In Singapore

What to do when those who owe money, don’t pay money.


In tough financial times such as the one we find ourselves in, the last thing we need is to be owed money by companies whom we engage with for goods or services. This is true whether we’re consumers or run our own business.

In such situations, short of naming and shaming them on social media, here are the channels available to you to (legally) recover what you’re owed.

Read Also: Snowball Vs Avalanche: Which Is The Best Method For Paying Off Your Debts?

#1 Contact The Company And Seek An Amicable Solution

From a cost, time and stress perspective, it is most ideal to settle payments owed in an amicable manner, without having to resort to hiring debt collectors, private investigators or lawyers.

Companies run into cashflow challenges all the time, and they are likely to deal with you in good faith if you showed understanding and the willingness to work things out with them.

Remember, if you push too hard and the person or company is forced to declare bankruptcy, you might be worse off and only receive cents on the dollars you’re owed.

#2 Understand Your Debtor And Negotiate A Payment Plan

If an amicable solution isn’t possible, or if the company outrightly cut off contact, then the next step would be to gather as much information about them as possible, including ascertaining the company ownership, directors, as well as other filings with ACRA, the official government business registry.

However, if you have ascertained that you may have been taken advantage of, such as when the debtor claims he has difficulty repaying the debt but appears to be financially stable, your next course of action will be to file a claim with either the Small Claims Tribunals of the Courts, depending on the amount owed.

If you already decided to hire a lawyer or debt collector to recover your debt, they would also be able to assist you in conducting such checks.

Read Also: What Happens To A Person’s Debt When They Pass Away In Singapore

#3 File For Claims And Obtain A Court Judgement If Negotiation Fails

If the debt is owed up to S$20,000, you can file a claim with the Small Claims Tribunals. Lodging your claim is quick and inexpensive, and you do not need to hire a lawyer to file a claim.

However, do note that the limit on the claim amount is maximum $20,000, unless consent is obtained from both parties to raise the limit to $30,000. Also, the Tribunal only hears specific kinds of cases, and loans are excluded from hearings.

If the amount you are owed exceeds $20,000 or if your case falls outside the jurisdiction of the Small Claims Tribunals, you will need to file a civil claim with the State Courts, which follows the normal civil litigation process. You can either choose to represent yourself, or to engage a lawyer to assist you when filing a claim with the Courts.

If you choose to engage a lawyer, the lawyer will usually first send a letter of demand before filing the case. The subsequent cost of fighting the case is dependent on the complexity of the case, as well as the defence the other party is putting up with.

If the debtor is an individual, and the debt is more than $15,000, you can file for bankruptcy proceedings against the person. This brings personal restrictions on the individual’s financial matters, and may encourage the debtor to pay up if he is able to.

Read Also: What Means To Be A Loan Guarantor In Singapore: Responsibilities And Liabilities

#4 Enforcement Of Debt Repayment

The debt recovery does not end with obtaining a court judgement or Order of the Tribunal. You will still need to enforce the court judgement or order in order for it to take effect.

For instance, in obtaining the Order of Tribunal, any orders to effect payments by the respondent are coupled with a deadline for payment. If the respondent does not pay or appears to be defiant in complying with the order and appears to possess sufficient assets of value, a separate enforcement proceeding can be taken against the debtor.

In most cases, a writ of seizure and sale may be enforced, where the debtor’s properties will be seized and may be sold later via public auction.

Taking Steps To Avoid Bad Debts In The First Place

By now, you would have a good understanding that recovering a debt is not a straightforward process. This is why it is important to mitigate such situations yourself from such situations by taking measures such as imposing upfront deposit, credit limits or even bank guarantees to mitigate bad debts.