The Basics to Debt Recovery

Have you lent a sum of money to a friend or relative through an IOU but have yet to receive the money back? Or have you provided a business service or goods to a client and they have yet to make the payment? You have asked and asked but all to no avail. What will you do next? This article will aim to help you out if you are ever in this situation.

Who is the Debtor?

First, of, you will first need to know who the debtor is. What this means is that you will need to know who this person is before you can start claiming any fees. You will need to ask yourself whether this person has any other outstanding debts valued at more than $10, 000 or if they are currently under filing for bankruptcy. This information will be useful for you as bankruptcy carries personal restrictions on the debtor and they may be encouraged to pay up the money that they owe to you.

What Assets Does Your Debtor Possess?

You will then need to know of your debtor’s assets when pursuing an action of repayment. Hiring a good lawyer will give you a better assessment of your debtor as they can conduct checks on your behalf. Things like whether they are employed, their income, any valuable assets can be useful in determining if your debtor can repay your money. What happens then if the debtor is broke without any money? They will not have any cash or assets to repay their debts with. In this situations, you would be better off not pursuing legal action and instead, negotiate a payment plan with them instead. Getting to pay 10 percent of their salary over a certain number of months, for example, would be more cost-effective than pursuing the matter in a Court of Law. Of course, do consult a good Singapore lawyer that is trained in debt recovery matters before deciding a course of action.

How long Does an IOU last for?

If the IOU states a repayment date, you will have six years from the stipulated repayment date to commence legal proceedings. If there is no repayment date stated, the six-year time limit will start from the date when the cause of action began.

Should I Hire a Debt Collector?

Depending on the actions taken by the debt collector, it may turn out to be illegal for them to chase the debtor for your money. Their actions may come off as harassment. Although there are no laws regulating debt collection, they are still susceptible to criminal charges if found to have committed as such. Conduct such as banging on their door and shouting vulgarities, though may be standard debt collecting practices, are against the law. To use threatening, abusive or insulting words or behavior with the aim of causing alarm to the debtor or causing them to believe that immediate unlawful violence will be used against them is a crime. Spray painting “owe money pay money” on their property will constitute as vandalism and the debt collectors will also be charged accordingly. You must note of the legal ramifications when dispatching a debt collection agency to retrieve your money as it may implicate you if you or your debtor reports you to the authorities or even sue you if they are aware that you were behind the harassment.

What Will My Lawyers Do?

Letter of Demand

Your lawyer will assist in drafting out a Letter of Demand. This letter will state the amount of money that is owed to you and that payment must be made before a certain time. A Letter of Demand is usually sent to warn the debtor that you will commence legal action unless payment is made. This may potentially save you a good amount of your money by avoiding litigation if the debtor complies. The letter of Demand can also be used as evidence in a Court of Law that you had attempted to settle the matter prior to the Court hearing.


If the debtor refuses to comply or plays hardball, and that they appear to possess sufficient assets of value, enforcement can still occur. The most common enforcement method adopted by most lawyers is the issue of a writ of seizure and sale. This will authorize the bailiff to seize and sell movable property belonging to the debtor to and pay off their debt to you. There are other methods available as well such as garnishee proceedings or the issuance of a writ of delivery to name a few.

How Can We Help You?

Debt recovery is a delicate issue and the documents required to process the actions to be taken may be too technical and complex for you to fully understand. Worry not, at I.R.B. Law; we have experienced lawyers who are well versed in Singapore debt recovery proceedings. We will be able to guide you through and explain to you throughout each and every stage of your case. We understand that going through such an event in your life is difficult and emotional. So contact us to receive advice on how case proceedings can be best handled so that you can focus on getting back up on your feet. Our first consultation is usually free as we wish to focus on you and not on your wallet. So don’t hesitate and reach us at [email protected] or call us at +65 6589 8913 and schedule an appointment with one of our experienced lawyers today. Please do not hesitate to contact us should you require further clarification or have any other inquiries. The information contained in this article is provided for general information only and may not reflect current status in relation to applicable law, cases, settlements or judgments. Nothing contained on this website or article is intended to constitute legal advice, nor should it be construed as I.R.B Law LLP agreeing to provide legal services to you. You acknowledge and agree that your use of this website shall not create a lawyer-client relationship with I.R.B Law LLP.