The Debt Repayment Scheme, which was passed in Parliament in January, will help this group of debtors avoid being taken to court and declared bankrupt.

To get on this scheme, a DRS debtor will have to propose a repayment plan to pay off his debts within five years.

An average of 3,200 people were made bankrupt every year, over the past five years.

Of this figure, about 40 per cent of them owe less than $100,000, and can be considered for the scheme. There are 26,606 bankrupts in Singapore, as of March 31, the latest data available.

By not being declared bankrupt, the DRS debtor will not be subject to the restrictions that bankrupts face.

These include requiring permission to travel overseas without official permission and having to disclose their bankrupt status if they want credit sums of more than $500.