What are the benefits of DRS?

DRS offers several benefits for individuals who are struggling with unsecured debt, such as credit card debt, personal loans, licensed moneylender loans, bills and even certain unsecured business debts. DRS is designed to provide debt relief while helping debtors manage their financial obligations responsibly. 

Here are some of the key benefits of DRS in Singapore:

• Consolidation of Debts: DRS allows you to consolidate multiple unsecured debts into a single monthly payment, making it easier to manage your financial obligations.

• Freeze Interest Rates: Once your DRS commences, the interest rates on your outstanding debts freezes. This can lead to significant savings over time.

• Affordable Monthly Payments: The DRS administrator works with you to determine a reasonable and affordable monthly repayment amount based on your income and expenses. This ensures that your repayment plan is tailored to your financial capacity.

• Structured Repayment: DRS provides a structured and disciplined approach to debt repayment. You'll have a clear plan in place, and as long as you stick to it, you'll make steady progress toward becoming debt-free.

• Protection from Legal Actions: Once you are on a DRS plan, creditors are prohibited from taking legal action against you to recover the debt covered by the plan. This protection offers peace of mind and relief from creditor harassment.

• No Liquidation of Assets: Unlike bankruptcy, DRS allows you to retain ownership of your assets. You won't need to sell your home or other valuable possessions to repay your debts.

• Debt Forgiveness: If your financial situation is dire and you are unable to repay the full amount of your debts even through a DRS plan, the scheme may provide for partial debt forgiveness. This means that a portion of your debt may be discharged after successful completion of the plan.

• Credit Score Improvement: While your credit score may be affected initially when you enter a DRS plan, successfully completing the plan can lead to credit score improvement over time. This is because you're demonstrating your commitment to repaying your debts.

It's important to note that DRS is only available for unsecured debts. Secured debts, such as mortgages and car loans, are not covered by DRS. 

Before entering into a DRS plan, it's advisable to seek advice from a reliable credit counselor or debt consultant to assess whether it's the right solution for your specific financial circumstances.