Anonymous
What is the difference between debt repayment schemes available in Singapore?
I heard that there are 3 debt repayment schemes:
1) Debt Consolidation Plan by participating banks
2) Debt Management Plan by the CCS
3) Debt Repayment Scheme by MAS(?)
I'm a bit confused as to the differences between the 3 schemes and which one I should be looking at. Any kind souls can help? Thank you
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Leslie Koh
12 Nov 2019
Associate Financial Services Manager at Prudential Assurance Company Singapore
It depends on your income as well as your debt amount.1) Debt Consolidation Plan by participating banks Unsecured borrowing excluding renovation loan, education loan, joint accounts. Debt size must be minimum more than 12x your monthly income, and only for Singaporeans & PRs. Will have 1-month income revolving credit facility. No public record.
2) Debt Management Plan by the CCS All unsecured borrowing, including renovation loans, education loans, car loans, etc. Debt size must be minimum $10,000 and above, no limit on the size. Available for all nationality, no credit facilities and no public record.
3) Debt Repayment Scheme Essentially, it's declaring bankrupt. It covers all unsecured borrowing, minimum $15,000 to a max of $100,000, no credit facilities, and there will be a public record.
Depends on the severity of your case, you should go in this order, DCP first, then DMP before going to DRS. DRS is your last resort.
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If you are neck deep in debt, a debt consolidation can help but it's really a change in behaviour that will get you out of the debt mess. Consider reading Dave Ramsey's Total Money Makeover, can borrow it for free at NLB.