MinLaw issues response to feedback received on proposed changes to Debt Repayment Scheme

26 February 2026

On 20 January 2026, the Ministry of Law (“MinLaw”) issued its response to the feedback received from the public consultation on proposed changes to the Debt Repayment Scheme (“DRS”). From 9 to 27 June 2025, MinLaw conducted a public consultation to seek feedback on proposed amendments to the Insolvency, Restructuring and Dissolution Act 2018 and the Insolvency, Restructuring and Dissolution (Debt Repayment Scheme) Regulations 2020 in relation to the DRS. 

A key proposal was the introduction of a new criminal offence to target the soliciting and canvassing of any person, in the course of any business, to make a bankruptcy application. The proposal aimed to address the increasing number of debtor-initiated bankruptcy applications where debtors borrow irresponsibly to pay for consultancy firms’ services in helping them apply for bankruptcy with the intention of abusing the DRS to obtain a discount off their debts. 

The penalty for the proposed new offence was a fine of up to S$10,000 or imprisonment of up to three years, or both. Following the feedback received, MinLaw is considering increasing the maximum fine to S$30,000 to serve as an effective deterrent. 

Where applicable, MinLaw will incorporate the feedback in the upcoming Insolvency, Restructuring and Dissolution (Amendment) Bill. 

Background 

Introduced on 18 May 2009, the DRS is a voluntary debtor-driven scheme intended to help wage-earning debtors with unsecured debts not exceeding S$150,000 avoid bankruptcy, while helping creditors receive higher repayments than what they would otherwise receive in the event of bankruptcy. Under the DRS, a debtor with a regular source of income will formulate and implement a debt repayment plan where he uses a portion of his income to pay all or some of his debts within a maximum period of five years under the supervision of the Official Assignee. Upon completion of the plan, the debtor will be released from his debts under the DRS. 

Reference materials 

The following materials are available on the MinLaw website www.mlaw.gov.sg: 

For further information about the MinLaw public consultation, please see our article “MinLaw proposes changes to Debt Repayment Scheme: Criminalising the soliciting and canvassing of any person to make a bankruptcy application”.