What is debt Recovery?

Debt recovery is the process of collecting money owed by way of a legal process. It is usually the last resort after all the other collection efforts fail. Each process is unique, depending on the situation at hand. However, there are those common steps that you go through in every debt recovery process. Below are steps for debt recovery in Singapore:

Initial Consultation

Before initiating any stringent measures on the borrower, you must get to know the debtor better. Verify their financial status and get to understand the nature of the loan, whether secured or unsecured, business or personal loan, and so forth. This is because if it is a personal loan, the debt recovery process in Singapore requires that the case be treated as a civil case. For company debts, they should take a legal process. Also, get to understand the reason for default.

Debt Assessment

At this sta due diligence is carried out to determine the capability of the debtor to settle the amount in question. This is the point you decide the route the collection process will take. If you identify that the debtor can pay the debt without involving the legal process, you negotiate and have the debtor write a commitment on how to settle the amount. But, if you identify that the debtor cannot pay the debt, then the next step is to initiate a legal process.

Issue Demand Letter

This is a formal letter sent to the debtor to warn them of the impending legal process. The letter gives the debtor a time frame, mostly two weeks to clear the debt or to regularize the account, failure to which a legal action shall be instituted. This is a very useful document as it prompts the debtor to engage the lender on plans to clear the debt. The demand letter is also a crucial document if the case escalates to court, as it acts as proof that efforts were made to recover the debt before initiating further action.

Demand Letter Response

Once a demand letter is issued, the debtor is given a timeframe to respond. This letter contains the amount due and the lender’s intention to take legal action if the debtor does not regularize the account. The debtor is expected to give a positive response within the time frame, failure to which legal action is taken.

Filling Court Case

If the demand letter does not yield any fruits, or the parties cannot agree on payment plan, then the next direction is to initiate a legal process. A case is filed with the appropriate court, but the course of action depends on the amount involved.

Enforce Court Decision

The last and final step is to enforce the court decision. A court can direct the disposal of the collateral used and recover the outstanding balance from the proceeds. It is also the same court that can declare somebody bankrupt.


The debt recovery process is straightforward. It starts with consultations with the debtor to debt assessment, issuance of the demand letter, court filing, and court determination. If you are looking for debt recovery services, do not hesitate to follow this link.