On July 13, 2023, over 5,000 people witnessed a debt recovery process on Twitter. Microfinance banks might need to learn one or two things here.
It’s common knowledge that debt collection can be a very tedious situation. But to help with this, we’ve put together a guide on how to get your money back using legal means and other alternate methods.
But first, here’s something you should know
According to Section 18 of the Limitation of Statute Law, an action for debt recovery cannot be brought after six years. Section 20 (1) a of the same Law states, “An action on a simple contract for recovery of debt must be brought to court within six years from the date the cause of action accrued”.
This means that after six years, if you’ve still been unable to recover the money owed you, you no longer have the right to take action against the debtor under the Law, especially if no part of the money was paid within that time.
So to avoid being in this situation, here’s the lawful process for debt recovery in Nigeria:
Mediation:
In Nigeria, it’s expected that before filing a lawsuit for debt recovery, both parties have tried to settle amicably or through arbitration.
Consultation:
If the process of mediation fails, then a lawyer should be consulted. During the consultation process, necessary documents such as invoices, emails, written notes, memos, letters, or written agreements should be presented for evaluation.
A Letter of Demand:
If there’s no written agreement between you and the debtor, then a Letter of Demand
- The name and address of the debtor
- The amount owed and the interest accumulated (if any)
- A timeline for expected payment (which should be at least seven days)
- The steps that will be taken if payment isn’t received
This letter generally shows your commitment to getting your money back and hints at the possibility of a court case.
Lawsuit:
If the debt still isn’t paid by the end of the timeline indicated in the Letter of Demand, then a suit can be filed through your lawyer. Courts in Abuja, Lagos, and some other states allow for fast-tracking debt recovery cases. Also, under the new Lagos rule, as seen in Order 56 High Court of Lagos State Civil Procedure Rules 2012, debt recovery cases must be concluded in a short time, i.e., nine months.
Surprisingly, debt collection under Nigerian Law seems relatively straightforward, but if you’re open to using more unconventional methods, you can try these out:
Publish your debtor’s name in newspapers
One lesson we’ve learned from the Bird app is that public shaming works.
And not surprisingly, this method is quite popular and effective, as people, by default, tend to protect their social image. So, going this route may actually get you your money as soon as possible.
Involve area boys
Sometimes debtors need a little encouragement, and the best way to achieve this might be with your local thugs. Don’t let area boys harm the debtor o; just lirru threat here and there. Fear might help them vomit the money.
Take the matter to your village people
If all methods fail, maybe it’s time to use spiritual means, and who better to help than them?
The point is that you should go above and beyond in holding them accountable; don’t be shy or feel embarrassed about being cheated. Speak up and ask for help.
