Self Admin

If you are unable to make the lump sum settlement for your outstanding debts or experiencing difficulties servicing the monthly payments under the current terms and conditions, you can write in to the creditor to appeal for a more manageable installment payment arrangement.

Below are some pointers to self-administer your debt problem.

(1) Accept the need to make changes

You will need to change your lifestyle and money management habits to better manage your finances so that you will have the funds to make payment to your creditors.

(2) Take stock of all your resources

You could think of ways to increase your income (e.g. rent out a room, take up a part-time job), explore if there are assets (eg. shares) to sell, and list down all your available income sources.

(3) Take stock of all your debts

You should list down all your debts owing to the banks, telcos, town council, Singapore Power, IRAS, CPF, HDB, etc and also to the individual creditors like parents, siblings, friends and colleagues, etc.

Write down the names of all your creditors, the amount owing and the existing monthly payment amount for each of them.

(4) Discuss your financial situation with your family member(s)

Be upfront with your family about your debt situation.  Even if your family may not be able to help you financially, their moral support is very important.  Your family members could work together to help contain or take over some expenses so that you could have a little bit more funds to make payment.

(5) Work out a monthly budget

Your monthly budget should make provisions for all expenses that you may need to make payment either on a daily, weekly, monthly, yearly or ad-hoc basis.

The monthly budget should take care of all possible expenses that you may incur within a year (e.g. gifts for wedding, medical fees, buying new shoes). Ensure that the budget takes care of all necessary expenses and is not luxurious (e.g. no overseas holidays until the debt is settled).

(6) Prepare a repayment plan

Based on your available budget surplus (income minus expenses), pro-rate the amount to each of your creditor.

Pro-rata payment basically means that the biggest creditor receives the biggest chunk of your available funds, and the smallest creditor receives the smallest chunk of your available funds.

Prepare the repayment plan by listing down the creditors’ names, the amount you owe and the pro-rata payment amount you propose to pay to each of them.

Pro-rata Calculation Formula:


(7) Write an appeal letter with supporting documents to your creditors

An appeal letter is basically to inform your creditor that you need help to repay your debts.

In the letter, you may want to explain about the adverse changes in your financial situation that renders you unable to meet your debt obligations under the existing terms and conditions.  You are to indicate your repayment intention and request for the creditor’s kind indulgence to review your proposal.

The letter should include supporting documents such as the income document, your monthly budget and your repayment plan.

Please click Self-Admin pack for reference.