1.1 Amicable Phase
Accounts Receivable Singapore is a leading provider of professional debt collection services. Our team is comprised of professionals in the industry, and it is their goal to maintain healthy and friendly communication between the debtor and the client throughout the entire process. Our collection professionals are involved in the entire process in-house, and we shy away from outsourcing any part of the process. Communication between our professional team and the debtor will be pursued orally and in writing. Accounts Receivable Singapore strictly follows the local laws and regulations within Singapore, including those passed federally and in each state.
1.1.2 Local agents and field visits
Accounts Receivable Singapore has the option of employing field agents who can make local visits to a debtor’s physical location in the interest of speeding the process and ensuring a better chance at success. This is primarily done to assess the debtor’s business operation and verify its location. Accounts Receivable Singapore charges roughly 15 percent of the debt’s cost to creditors in exchange for the services of our field agents. This cost will vary based on the debt’s size and overall age. Under the local laws of Singapore, a creditor must be able to supply an invoice in order to commission either a field visit by an agent or a skip trace of the business’ information.
1.1.3 Interest on debts and claims
Accounts Receivable Singapore adheres to the terms and conditions of any standing agreement between our client and the debtor that w are pursuing. These terms and conditions are typically agreed upon when lines of credit or other financing offers are extended, and they dictate the amount of interest that we are able to collect on behalf of our clients.
It should be noted that Singapore, like many other countries, has become accustomed to using the interest paid on a debt as a form of negotiation. This tool is often used to encourage debtors to pay a past due balance to a creditor, and it is often dropped when a creditor agrees to make a payment on their outstanding debt.
1.1.4 Debt collection costs
The costs associated with the collection of a debt can be charged to the debtor at the time of their payment. This can only be done, though, if the agreement between the creditor and debtor allows for such charges to be made. If not, no charges can be added to the debtor’s outstanding balance.
Again, the costs associated with collecting a debt are typically used as a negotiation tool between the creditor and the debtor. Accounts Receivable Singapore will employ this tool in order to ensure payment of a debt. However, given the escalated costs of legal proceedings in Singapore, it is hard for accounts Receivable Singapore to recommend any legal action based solely on the debtor’s paying of collection costs on top of their existing debt.
1.2 Legal Procedures
At the beginning of legal proceedings, the solicitors hired by Accounts Receivable Singapore must issue a statutory letter to debtor’s demanding payment of their outstanding balance. This helps to prove that all pre-court attempts to collect the debt have failed and that there has been no response from the debtor.
The court will then advise Accounts Receivable Singapore, and our client, to issue a statement of claims on the debtor. This involves providing quotes to our company for all court actions that will be placed against the debtor, giving us a solid estimation of the expenses associated with ongoing legal action in pursuit of payment.
1.2.2 Required documents
Legal proceedings in Singapore require a number of important documents before they can be permitted to proceed by the courts. These documents include the following:
- Copies of any invoices between the debtor and creditor
- A history of account statements or, at the very least, a current statement of the account
- Statements showing any payments toward the debt, as well as any credit notes paid against outstanding invoices
- The contract between both parties
- Terms and conditions as agreed to by the debtor
It may be necessary to provide even further documentation as the lawsuit winds its way through Singapore’s judicial system. This documentation can include the following:
- Copies of the business contract
- Copies of any orders made by the debtor
- Delivery notes and confirmations
- Delivery invoices
These documents will be requested as needed by the judge overseeing the legal proceeding. If a dispute is lodged by the debtor against the creditor, then the judge handling the case will often request to see all conversations between the debtor and the creditor that concern the debt itself. This will include emails and letters. Because these things will greatly assist the lawyers hired by Accounts Receivable Singapore, they should be kept until the conclusion of the legal proceeding against the debtor. If any oral negotiations proceed, the creditor may be required to provide meeting notes or system notes about any agreements made between themselves and the debtor.
1.2.3 The legal dunning procedure
The solicitors working with Accounts Receivable Singapore always send a formal letter of demand to the debtor. Appropriate documentation is attached when taking this action, in order to ensure that the legal dunning procedure is as effective as possible.
After the legal proceedings have begun, solicitors representing Accounts Receivable Singapore will draft and serve a Statement of Claim for the value of the full debt owed by the debtor. Upon receiving this statement, the debtor may begin formally defending the proceedings within an allotted period of time. The amount of time taken on behalf of the debtor will determine the cost of the legal proceedings, as well as how long the proceedings will take from start to finish. After the court has scheduled a hearing, the solicitor representing our client will likely be required to attend directly at some point as the case proceeds. In Singapore, legal proceedings are a highly expensive proposition for creditors and they will often require quite a few hearings before the court finally decides on a proper judgment amount and issues a statement about the costs incurred by the creditor and/or debtor.
1.2.5 Costs of legal proceedings
Singapore is well known for having some of the highest legal costs in the world, and this is especially true for proceedings involving debt collection. The costs of a legal proceeding on behalf of our client must be analyzed by Accounts Receivable Singapore on a case-by-case basis when legal action becomes necessary in order to collect the outstanding balance. The cost of these proceedings as charged by Accounts Receivable Singapore will depend on the client, the debtor, the amount of the debt, and the age of the debt itself.
Typically, the solicitors that represent Accounts Receivable Singapore in the country’s courts charge roughly $1,000 SGD for a statutory letter of demand to be sent to the debtor. The cost of issuing a Statement of Claim is typically charged as a percentage of the debt. In some cases, however, it can be determined as a flat figure depending on the size of the debt and the nature of the file being pursued by our solicitor.
Due to the unique legal system in Singapore, and the generally high cost of pursuing such action, it is very difficult to predict even a rough estimation of the costs associated with a lawsuit. And, because courts in Singapore have a long turnover period, extra hearings and meetings may be scheduled and raise the costs even further. Other extra costs will be incurred if experts or witnesses are required on behalf of our client.
1.2.6 Expected timeframe
Singapore’s courts are well known for having a long holdover period, and this causes debt recovery cases in the country to last longer than in many others around the world. It’s not unheard of for a typical debt recovery case in Singapore to last a minimum of one year, with some cases lasting upwards of three years. Most courts will require multiple hearings before the judge can issue a final judgment, though this will depend on the complexity of the case itself. The duration of the proceeding can also vary based on the availability of the judge and the lawyers on both sides of the case.
1.2.7 Interest and other costs during the legal phase
The determination of whether or not to award costs and interest to the creditor is the sole responsibility of the court system in Singapore. Solicitors on both sides of the matter can raise specific details about these costs; in the case of clients represented by Accounts Receivable Singapore, our solicitors can provide their expert opinion as to whether or not these costs will be granted or denied to the creditor. If a settlement is achieved during the legal phase of debt recovery, both the creditor and the debtor will pay them. These costs will be determined in proportion to who prevailed or failed in the case.
1.3 Insolvency proceedings
The primary set of regulations regarding insolvency proceedings in Singapore are laid out in the country’s Companies Act of 2006. This act is based largely on insolvency laws and principles found in the United Kingdom and Australia, both under common law systems. The Companies Act of 2006 dictates that a debtor can be liquidated in two ways: The debtor can voluntarily initiate a liquidation proceeding, or a court can order a required liquidation of the company’s assets in order to cover outstanding debts.
Insolvency in Singapore, as mentioned earlier, does closely resemble the system currently employed in the United Kingdom and Australia. That includes taking security from the debtor by floating a charge over all, or most of, a debtor’s current assets. It also includes the possibility of an out-of-court foreclosure procedure that is commonly known in both Singapore and the United Kingdom as receivership.
Singapore is known for granting security to all types of corporate assets. This security can be enforced outside the insolvency proceedings, as well as within them. If the creditor has registered this security with Singapore’s Registry of Companies, it will be enforceable when the debtor becomes insolvent. The objective of the insolvency laws currently enacted by Singapore are to restore the debtor to profitability, rather than to immediately begin liquidating the debtor’s assets and dissolving their company.
A secondary goal of any insolvency proceeding is to establish a fair system for claims prioritization and the distribution of assets among creditors with an outstanding balance against the company. After the company’s assets have been assessed, the liquidator assigned to the insolvency case will adjudicate all of the claims that have been filed against the company. They’ll then decide whether to permit those claims or reject them. Any remaining surplus that remains after paying creditors and the costs of the liquidation proceedings will be returned to the company’s shareholders. Accounts Receivable Singapore recommends consulting our solicitors before engaging in any liquidation proceeding.
1.3.3 Required documents
In order to lodge a claim on behalf of our clients during a debtor’s insolvency proceedings, Accounts Receivable Singapore will need to be provided with the following documentation:
- A signed Power of Attorney declaration
- Copies of any invoices
- Copies of relevant contracts with the debtor
- Copies of any orders, order confirmations, or delivery confirmations
- Copies of any conditions of sale, if relevant to the case
- Copies of any correspondence that might help to verify the claim against the debtor
1.3.4 Expected timeframe and outcome
The duration of an insolvency proceeding in Singapore can vary widely. The country’s shortest cases, which are often the most simplistic ones, last just a year from start to finish. More complex cases will obviously require more time, and it’s not unprecedented for a larger insolvency proceeding to take as many as five years to fully complete. Laws in Singapore do protect the priority of secured creditors over virtually any other creditors or claims against the debtor during an insolvency case.
The time frame and outcome of the case can also be affected by international asset locations and other factors outside the country’s borders. Before filing a claim, it is the recommendation of Accounts Receivable Singapore that our clients get our solicitors’ expert opinion on how, when, or if, filing a claim might be recommended.To get started today, call us at321-710-3530 to speak with an associate