How to deal with Debt Collectors in Singapore

Dealing with debt collectors in Singapore can be stressful, but it's essential to handle the situation calmly and responsibly. 

Here are steps to help you manage interactions with debt collectors effectively:

Understand Your Rights:

• • The Debt Collection Bill was passed in Parliament on 13 September 2022. Under the Bill, a licence is required from the Police to operate a debt collection agency and persons who work as debt collectors for such agencies also require approval from the Police. The new Bill will prohibit debt collectors from engaging in any behaviour that threatens the physical safety of the debtor or any other third party, while collecting debts. It will also make debt collector agencies responsible for ensuring that their debt collectors act professionally.

Request Verification:

• • Debt collectors should provide written proof of the debt they are attempting to collect. Ask for a validation letter that includes details of the debt, the creditor's name, the amount owed, and your rights as a debtor.

Communicate Openly:

• • If you receive a call or communication from a debt collector, answer it. Avoid ignoring their calls, as this may escalate the situation. Instead, respond politely and ask for their contact information and the details of the debt.

Keep Records:

• • Document all communication with debt collectors, including dates, times, names of individuals you spoke with, and the content of the conversation. This can serve as evidence if you need to dispute any claims.

Negotiate If Necessary:

• • If the debt is valid, but you are unable to pay the full amount, contact the debt collector to discuss possible repayment options. Be prepared to provide financial information to support your proposal.

Beware of Aggressive Tactics:

• • Debt collectors in Singapore are prohibited from using abusive language, making threats, or engaging in harassment. If you experience such behavior, report it to the police and relevant authorities.

Be Cautious with Payments:

• • Before making any settlement payments, ensure you have a written agreement that outlines the terms, including the amount and due date. Never make payments without knowing what it is for.

Check the Limitation Period:

• • In Singapore, for actions founded on contract a time limit of 6 years from the date on which the breach occurred is applicable for pursuing legal action to recover a debt. If your debt is past this time frame, you may have a legal defense.

• Seek Legal or Financial Advice:

  • If you are unsure how to handle the situation, or if you believe your rights are being violated, consult with a legal professional or financial advisor or Debt Consultant for guidance.

• Consider Debt Management Options:

  • If you have multiple debts and are struggling to manage them, explore debt management options such as Debt Repayment Schemes (DRS), Debt Consolidation Plans (DCP), Debt Consolidation Loans (DCL) or consulting with a Debt Counselor or Debt Consultant.

Remember that you have rights as a debtor, and debt collectors must adhere to specific regulations and guidelines when collecting debts in Singapore. 

It's crucial to stay informed, communicate openly, and seek assistance if needed to resolve your debt issues responsibly.