Debt Collection Agency Singapore
Amicable Debt Collections Singapore
1.1. General information
Cosmopolite Collections maintain a professional collection process, focusing on the relationships between our clients and their debtors at all times.
Our team of collection specialists carry out the collection process in-house, contacting debtors both verbally and in writing whilst adhering to federal and state laws.
1.2. Local agents
We can employ local agents to make field visits to debtors in all areas of the country, primarily to assess their business operations and location. The charge to use agents is typically around 15% of the debt’s recovery and varies depending on the age and size of the debt. Under local laws, the creditor must have the invoice to action any skip trace or agent visit.
Cosmopolite Collections use the clauses or agreements made between parties in a credit application or terms and conditions as the basis for any interest charges. From a cultural point of view, Singaporean debtors very rarely agree to pay late payment interest, and it is often used as a negotiation tool between debtors and collectors.
1.4. Debt Collection Costs Singapore
Charging debt collection costs to the debtor is not common in Singapore. Often, the late payment interest is used as a negotiation tool between the debtor and the collector if such a clause is imposed by the creditor and stated in the contract.
Given the high legal costs in this region, Cosmopolite Collections do not recommend any legal enforcement purely of collection costs.
2. Legal Debt Collections Singapore
2.1. General information
Our solicitors must issue a statutory letter of demand for payment. It is practical to prove to the court that all precourt efforts of collection yielded no result by revealing all prior correspondence with the debtor.
The court will then advise whether to issue a statement of claim on the debtor. Quotes will be provided to Cosmopolite Collections for these court actions that reflect the seriousness of the case placed with them.
2.2. Required documents
In order to begin any legal proceedings, we require copies of
- the contract with terms and conditions, copies of the invoices and a clear statement of account indicating payments
- and credit notes that have been paid against the outstanding invoices, as well as any contracts or terms and conditions binding both parties.
As the lawsuit proceeds further, we may require further documentation, such as copies of the orders, confirmations, delivery notes and invoices, that can be requested when needed.
In case of dispute, all notes of conversations between the creditor and the debtor via letter and email that may assist our lawyers should be kept.
In the case of verbal negotiations, we may require meeting or system notes on what was agreed on.
2.3. Legal dunning procedure
In Singapore, our solicitors or local agents will always send a formal letter of demand with the attached documentation when taking action on a file.
2.4. Lawsuit in Singapore
Once the regular lawsuit procedure has commenced, our solicitors will serve a statement of claim for the value of the debt on the debtor.
The debtor may formally defend these proceedings within an allotted time, which will have an impact on the costs and timelines involved.
Once a hearing is scheduled, our solicitors will rely on the affidavits from our client to support the case, although the client may be required to attend directly at some point in the case.
Cases in Singapore are expensive and will often require multiple hearings before the court makes a judgment and a decision on costs.
2.5. Debt collection costs Singapore
Costs of proceedings are high in Singapore. Individual costs can be provided on a case-by-case basis should legal action becomes necessary.
All the previous communication between the client and the debtor and the amount and age of the debt will influence the quote.
A letter of demand is not as expensive in Singapore – usually less than SGD 500. It will cost at least SGD 4,000 to get a default judgment, which includes a statutory letter of demand, a writ of summons, followed by a default judgment.
It is difficult to predict the total costs in Singapore, as there are long periods in the courts, and extra hearings may be scheduled.
There may be extra costs that arise for witnesses and experts if the debtor disputes the case.
2.6. Expected time frame
It is not uncommon for a case to run between one and three years through the courts, needing multiple hearings before a final judgment is handed down.
This obviously depends on the complexity of the case and the availability of the judge and lawyers on all sides.
2.7. Interest and costs in the legal phase
The decision to award costs and court interest will be in the hands of the courts, and specific details should be raised with our solicitors who can provide their expert opinions. In the case of a legal settlement, both parties bear the costs of the corresponding proceedings in proportion to their prevailing or failing in the case.
3. Insolvency proceedings
3.1. General information
Singapore’s primary insolvency laws relating to corporations appear in the Companies Act 2006 (the Companies Act). These laws are based on principles found under UK and Australian law.
A debtor can be liquidated either through a creditor’s voluntary liquidation proceeding or a courtordered compulsory liquidation.
The insolvency regime in Singapore includes a number of creditor-focused features that are common to the UK insolvency regime, including the taking of security by a floating charge over all – or substantially all – of a debtor’s assets and out-of-court foreclosure procedures known as receivership.
In Singapore, security may be given for all types of corporate assets and can be enforced both outside and within the insolvency proceedings.
Provided that the creditor has registered the security with the Registry of Companies within the requisite period, the security will be enforceable in the debtor’s insolvency.
The overriding objectives of Singapore’s insolvency laws are to restore the debtor to profitable trading when practicable and to maximise the return to the creditors as a whole if the company themselves cannot be restored to profitable trading.
The procedure will also look to establish a fair and equitable system for claim ranking and asset distribution among the creditors, and to provide a way to hold any persons guilty of mismanagement or misconduct within a company responsible for their acts.
After all assets of the company have been assessed and realised, the liquidator will adjudicate all the claims lodged against the company and admit or reject them accordingly.
Any surplus leftover after paying the creditors and costs of liquidation will be returned to the shareholders. The expert legal opinions by our solicitors are highly recommended.
3.3. Required documents
In order to lodge a claim on behalf of our client, Cosmopolite Collections need:
- An original power of attorney
- Copies of invoices
- Copies of contracts
- Copies of orders, confirmations and delivery notes
- Copies of general conditions of sales, should there be any
- Copies of any other correspondence that may verify the claim.
3.4. Expected time frame and outcome
The whole duration of an insolvency proceeding can take anywhere between one and five years. Singapore’s insolvency laws protect the priority of secured creditors, who have priority over virtually all other claims against a debtor.
Extra-national considerations regarding asset location can also affect the recovery prospects.
We would recommend getting our solicitors’ professional opinions regarding the liquidation of the debtor company.