Key facts
- The Debt Collection Act 2022 came into force on 1 December 2023
- Since 1 March 2024 every debt collection company needs a Police licence
- Small Claims Tribunals hear claims up to S$20,000, or S$30,000 with a Memorandum of Consent
- Most contract debts must be sued on within six years
The law: the Debt Collection Act 2022
The Debt Collection Act 2022 came into force on 1 December 2023. From 1 March 2024, every debt collection company in Singapore must be licensed by the Police, and it is an offence to carry on a debt collection business without one.
- Each individual who collects debts for a licensed company must be approved by the Police.
- The company is accountable for how its collectors behave.
- Lawyers and law practices are outside the Act, as they are regulated separately.
- Banks, finance companies and licensed moneylenders collecting their own debts are covered by a class licence instead.
What a debt collector can and cannot do
A collector can contact the debtor by phone, message and letter, visit them, ask for payment, and negotiate a settlement or instalment plan. A collector cannot threaten, intimidate, use violence, or harass. Parliament gave examples such as a collector brandishing his fist at a debtor or threatening physical harm. These remain offences under the Penal Code and the Protection from Harassment Act 2014, and can cost a company its licence.
Your options for recovering a debt
| Route | Who it suits | Limits | Cost to you |
|---|---|---|---|
| Debt collection company | A debtor who can pay but keeps delaying, or has gone quiet | Must hold a Police licence. Cannot take court action for you | Speedy: a commission on what is recovered. No recovery, no fee |
| Small Claims Tribunals | Disputes over goods or services, where you can represent yourself | Up to S$20,000, or S$30,000 if both sides sign a Memorandum of Consent. No lawyers | Filing fees. An order still has to be enforced if the debtor ignores it |
| Magistrate's Court | Larger claims, usually with a lawyer | Up to S$60,000 | Legal fees, usually paid whether or not you recover |
| District Court | Larger commercial claims, with a lawyer | Up to S$250,000 | Legal fees, usually paid whether or not you recover |
| Statutory demand (company debtor) | An undisputed debt owed by a company | Debt over S$15,000. The company has 21 days to pay before it can be presumed unable to pay its debts | Usually prepared by a lawyer |
Time limits
A claim on a contract, which covers most unpaid invoices and loans, must generally be brought within six years of when the money fell due. If the debtor acknowledges the debt in writing or makes a part payment, the six years start again from that date. Do not let an old debt sit: evidence fades and debtors move on long before the legal deadline.
How to choose a debt collection company
- Ask for its Police licence, and check the collectors who will contact your debtor are approved.
- Get a written agreement that states the commission, what you pay if nothing is recovered, and how recovered money reaches you.
- Prefer a success based fee, so the company only earns when you do.
- Ask how you will be updated. At Speedy, every case is updated on WhatsApp.
- Avoid anyone who promises results by pressure or threats. It is illegal, and it puts your own reputation at risk.
If you are the one being chased
Respond before the deadline, ask for the details of the debt in writing, and propose a plan you can keep. If Speedy has contacted you, see our page for debtors.
Sources
- Ministry of Home Affairs: Commencement of Debt Collection Act 2022
- Singapore Police Force: Debt collection business licence
- Debt Collection Act 2022 (Singapore Statutes Online)
- Singapore Courts: Small Claims Tribunals
- Limitation Act 1959 (Singapore Statutes Online)
- Insolvency, Restructuring and Dissolution Act 2018 (Singapore Statutes Online)