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Accounting and Corporate Regulatory Authority

What happens when a company is unable to repay its debts

If your company is unable to repay its debts several things can happen, such as debt restructuring, receivership, and judicial management.

Last updated 29 January 2026

Factors that determine the outcome

When your company is unable to repay its debts, what happens depends on:

  • Your company's annual revenue

  • Whether you have creditors (lenders with charges over your assets)

  • Actions you choose to take (like debt restructuring or voluntary winding up)

  • Actions creditors or courts may take

Available options and processes

Several things can happen when your company faces financial difficulties. You can start some processes yourself. Other processes may be started by creditors or the Court.

What may happen to your company

Option or process

Details

Simplified Debt Restructuring Programme (SDRP)

The SDRP is one of the programmes under the Simplified Insolvency Programme (SIP).

If your annual revenue is less than $10 million, you can use the SDRP to restructure your debts while staying viable to turn your business around.

The SDRP provides a simple, fast, and low-cost way to help companies restructure their debts.

More details: Contact the Ministry of Law if you have any questions on the SIP or SDRP.

Receivership

If you have creditors with charges over your assets, they may appoint a receiver to enforce the charge.

The receiver may sell the asset or run the business temporarily until they recover what is owed.

Judicial management

Your company (or its creditors) can apply to the Court for judicial management if it believes that:

  • The company is or will be unable to pay its debts.

  • There is a reasonable chance of rehabilitating your company.

The Court may appoint a judicial manager to take control of the business

This may include restructuring debts and improving operations to turn the company around.

Winding up (liquidation)

If your company chooses to close, you can wind it up.

Depending on your company's financial health, there are four ways to wind up.

Note: For more details on receivership and judicial management, please refer to the Companies Act (CA) or Insolvency, Restructuring and Dissolution Act (IRDA). You may also seek professional advice.