Article: Legal Debt Recovery

1. Someone owes you money? Breached a contract/agreement? Failed to deliver goods or services?

You can legally claim against the person or entity (e.g. company, LLP) for the debt, your losses, and/or a refund of the price. Here are some issues to consider in deciding how to claim or sue to pursue legal debt recovery against the person.

2. Does Singapore law apply under the contract?

Did the breach occur in Singapore or in connection with provision of goods or services in Singapore? Was the loan or debt made in Singapore?

If no, Singapore law may not apply. You may have to claim in another country’s courts.

3. How much is the debt or loss?

a. If ≤ S$20,000, you can file a claim in the Small Claims Tribunal (“SCT”) (or $30,000 if all parties consent in writing) (as of 1 November 2019). It’s cheap and informal. No lawyers involved. However, there is a 2-year time limit and the SCT does not hear some types of cases, including friendly loans, employment disputes, etc. Examples of cases it will not hear:

a. employment matters
b. friendly loans and claims by moneylenders
c. purchase of stock and shares
d. rental (but SCT may hear disputes on leases for residential premises which do not exceed 2 years and may order vacant possession, i.e. eviction of tenant) or charters
e. legal fees
f. co-broking
g. insurance claims
h. damage caused by use of a motor vehicle

b. If > S$20,000 ≤ $60,000 you must file a claim in the Magistrate’s Court (part of the State Courts).

c. If > S$60,000 ≤ $250,000 you must file a claim in the District Court (part of the State Courts).

d. If > S$250,000, you must file a claim in the High Court (part of the Supreme Court).

e. If ≥ $15,000, you can also consider suing the person for bankruptcy or entity for winding up / liquidation.

4. Is the person or entity located or registered in Singapore?

a. If yes, you can serve the court papers on him in Singapore.

b. If no, you may have to make applications to serve on him outside Singapore.

5. When was the debt due or when did the breach occur?

a. If > 6 years, your claim may be time barred under the Limitation Act.

6. Step 1: Letter of demand or statutory demand

a. Issue a letter of demand to the person. If you want to potentially sue for bankruptcy or winding up, issue a statutory demand (which has certain required elements).

b. The letter of demand should state the following:

i. Your identity (and your lawyer)

ii. What you are claiming or demanding about, including the key facts.

1. If your claim is based on written contracts or agreements, invoices, quotations, emails, letters, text messages, you should refer to them in your letter.

2. E.g. “breach of the service agreement dated 31 December 2017 between Tan Ah Gao and Seow Zah Bor by her total failure to provide the graphic design on the completion date”.

iii. What you are legally claiming against the person or entity, e.g. “you have committed a repudiatory breach of contract”, “you have been unjustly enriched”, “you committed the tort of negligence”.

iv. What you are demanding from the person e.g. compensation of S$200,000, liability for your losses to be quantified etc.

v. A deadline for the person to satisfy your demands, failing which legal action (a law suit) may be taken.

c. You can do this yourself or get a lawyer to do this for as low as $100 in professional fees. Note however that a statutory demand has certain mandatory requirements. If there are errors, it may be treated as invalid.

d. Note that for certain types of claims, e.g. personal injury, motor accident, medical negligence, there are certain pre-action protocols to comply with.

7. Step 2: Prepare, file and serve a claim or lawsuit.

a. Determine which court or tribunal you will be claiming in.

b. Determine whether a Writ of Summons or Originating Summons (“OS”) is appropriate. A writ typically involves a trial of disputed facts. An OS typically does not.

c. If Writ, prepare a Statement of Claim which sets out the material facts of the claim. If OS, prepare a supporting affidavit, which is a document setting out the material facts and documents and which you have to sign under oath before a Commissioner for Oaths.

i. Note that under the law, specific material facts must be pleaded for certain scenarios, e.g. fraud, condition of mind.

d. E-file on e-Litigation ( through a lawyer or the service bureau ( the Writ and Statement of Claim, or OS and Supporting Affidavit.

i. If it is a Magistrate’s Court claim, you would also have to prepare at this juncture a List of Documents setting out all the documents relevant to your claim, including written contracts or agreements, invoices, quotations, emails, letters, text messages, photographs, receipts.

ii. If it is not a Magistrate’s Court claim, you can prepare the documents first but need not file the List of Documents at the initial stage.

e. Arrange for personal service of the Writ, Statement of Claim and List of Documents, or OS and Supporting Affidavit on the person.

i. Personal service means that person has to personally receive the documents. If it is a registered corporate entity, e.g. company, LLP, this can be done by leaving it at the registered office address (registered address and UEN number can be found on

f. You can do this yourself or get a lawyer to do this for as low as several hundred dollars in professional fees. Note however that if there are errors in the court documents or invalid service, the entire lawsuit may be invalid or be struck out subsequently.

8. Step 3: Review and prepare reply to defence and counterclaim or apply for judgment in default.

a. After having received your court papers, the other person has to file an appearance in the lawsuit.

i. If not, you can apply for judgment in default against him.

b. Thereafter, the person has to file a Defence to your Statement of Claim. He may also make a Counterclaim against you in the Defence.

i. If he does not file a Defence, you can apply for judgment in default against him.

c. You would have to review his Defence and Counterclaim and prepare and file a Reply and Defence to Counterclaim.

9. Step 4 to Z: Various options possible.

a. What comes after this can take different permutations depending on which court or tribunal you filed your claim in and how the other party responds.

b. The other party may want to mediate and settle, obviating a trial or hearing of the dispute.

c. If not, there may be various steps in the proceedings which must be taken.

10. Cost-Benefit Analysis

However, do conduct your own cost-benefit analysis to determine whether it is worth pursuing a claim at all. Questions to consider include:

a. How much are you claiming for?

b. How likely is the person able to pay?

c. How likely are you able to enforce your judgment if you are successful? Does the person have substantial assets in Singapore?

d. How much will it cost to pursue a claim, up to a likely settlement?

e. How much will it cost to pursue a claim, if it goes to trial?

f. How likely will I win the case, given the evidence you have available?

11. Note that the above outline is a simplified form of the typical claim processes. There may be various considerations, factors, permutations and options which complicate the claim process. If you wish to consider pursuing a claim for debt recovery or losses, do consider consulting a lawyer. It can be affordable to pursue a claim if you can make the process efficient for yourself and your lawyer. Prepare all the necessary information and documents (as above), and email the lawyer.

Sample Letter of Demand for Outstanding Debt on Invoices

31 December 2000

ABC Company Pte. Ltd.
1 Toa Payoh Lorong 23 #01-01
Singapore 123456

Dear Sirs


1. In or around 1 October 2000, you, ABC Company Pte Ltd (“ABC”), contracted with us, Good People Pte Ltd, to supply goods to ABC, and we did supply such goods. In respect of the supply of goods to ABC in or around October 2000, we issued the following invoices to ABC:-

a. Invoice No. 0001 dated 1 October 2000 for S$10,000;
b. Invoice No. 0002 dated 20 October 2000 for S$10,000.

2. The total amount owed by ABC to us under the above-mentioned invoices is S$20,000.00. To date, ABC has failed, neglected and/or refused to pay the outstanding amount due and payable to us.

3. Further, pursuant to the terms of the sale of goods set out in the above-mentioned invoices, interest of X per cent (X%) a month will be charged on outstanding debts. Accordingly, ABC is also liable to pay us interest of S$200.

4. In the circumstances, we HEREBY DEMAND that you pay the total sum of S$22,200.00 to us by 4 P.M. on 14 January 2001, failing which we will take all necessary action to enforce our rights without further reference to you and will look to you for all costs and expenses thereby incurred.

5. All our rights are expressly reserved.

Yours faithfully,

Managing Director
Good People Pte Ltd

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