Debt recovery is a vital subject for every business. Companies routinely involved in transacting and dealing with people would always have something to do with recovery of debt either as a result of payments being owed or not fully paid. The essence of this post is to identify ways to recover debt within the confines of the law.
Debt recovery is a civil matter and resort to the Police or any security apparatus is prohibited.
What are these ways?
3 Ways To Recover Debt In Nigeria
There are various ways to recover debt. But, for the purpose of this article, we shall be considering 3 ways we often find applied in Nigeria.
We would discuss each of them in separate subheadings subsequently.
Demand Letter
This is a simple way of demanding for payment either when it is due or about to. It can also double as a prelude to a court action. Regardless, you can simply make a demand via a formal letter requesting payment according to the terms of the debt.
Note that this should be accurately and properly worded as the demand letter may be used for evidentiary purposes in court or otherwise.
Let’s proceed to examine recovery via the court.
Debt Recovery Via The Court
This is the most common way of debt recovery. Usually employed where the debtor fails or neglects to comply with the terms of the demand stated above. There are a diverse modes of recovery when using litigation and this depends on the debt sum in dispute. For example, summary judgement, admission, small claims procedure, etc may be employed to recover a debt.
Designated Debt Recovery Action
Parties may provide a particular mode for the recovery of debt and other related matters. ADR mechanisms such as arbitration, negotiation, conciliation, mediation, etc can be stated as parties’ preferred mode of debt recovery. In this case, parties seeking to recover debt have to follow the agreed route in compliance with contracted terms. Importantly, each of the above ways of debt recovery requires legal astuteness and so, it is vital you seek appropriate legal advisory before taking material steps in getting back any debt sum owed.
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References
Ifeanyi Ogbuka, “Legal Methods of Debt Recovery in Nigeria” available at https://www.tekedia.com/legal-methods-for-debt-recovery-in-nigeria/ accessed on November 27 2023
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