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Debt Recovery; The best way to go about it

It is very annoying when someone owing you refuses to pay. Naturally, different tactics come to mind; threatening the ...

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Debt Recovery; The best way to go about it

It is very annoying when someone owing you refuses to pay. Naturally, different tactics come to mind; threatening the individual, approaching the person owing with some goons, to beat out the money from him/her. As tempting as this idea might seem, don’t do it. Resorting to violence isn’t always going to yield results and sometimes, simply following the laws can get you a quicker result towards recovering your debt.

The first thing you need to know about recovering your debt in Nigeria is that debt recovery has an expiration date. What this means is that a limitation period of 6 years has been stipulated as the time with which your debt can be recovered. If anyone owes you, ensure you institute an action for debt recovery before 6 years elapses.

How do you recover your debts in Nigeria?

As earlier stated, ensure you don’t resort to any violent means to recover your money as they are procedures to follow; find below a list of procedures to follow to recover your money from a debtor

  • If you had a written agreement with your debtor, this should be easy, as the written agreement would contain in detail what steps to take if any party defaults on their agreement.
  • If you don’t have a written agreement, the first thing you need to do is write a letter of Demand to your debtor. This letter should contain; the name and address of you and the person owing, the amount of money that is being owed, the date you’re expecting payment (this should be at least 7 days), what you’ll do if payment is not made by the date written on the letter of demand.

If after sending out the letter of demand and there’s still no positive response, the next critical step to take is recruiting the services of a lawyer. 

Legal Action

With the help of a lawyer, your next step would be to institute an action in court for debt recovery. Debt recovery action can be instituted in Lagos state and some other parts of the country through the Magistrate court. Working with an experienced lawyer, like the ones in Avocat, can help you retrieve your money quicker. One way to go about retrieving your money from a Debtor is through a Bankruptcy proceeding.

How to recover Debt through Bankruptcy

If your Debtor is unable to pay his debt, which according to the law, should not be less than 2000 Naira, you can apply to the court for the issuance of a bankruptcy notice alongside your petition stating that your Debtor is bankrupt. The Debtor would be in the loop and would definitely notice the bankruptcy action against him and probably pay his debts. If the debtor is still unable to pay his debt and is unable to defend the bankruptcy petition, the court will then issue a receiving order.

Once a Debtor receives a receiving order, he would file a statement of affairs stating how he intends to distribute his assets, in order for him to liquidate his debt.

There are various other ways you can get your Debt recovered in Nigeria through Legal action. You can get in touch with Our Lawyers here in Avocat to get started.

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