The law has provided for a lawful process and procedure for debt recovery in Nigeria.
To start with, owing debt is a civil wrong, and not criminal wrong. Thus, the Police and other security agents may not have the power to arrest a debtor except the debtor, through the commission of a crime incurs such debt.
Some of the lawful methods and options to recover a debt in Nigeria include the followings:
Upon consultation with the Lawyer, the Lawyer is expected to write a letter to the debtor demanding the funds owed, warning about dire consequences if payment is not received on or before a stipulated date. A letter of demand serves as a pre-action notice for a debt recovery proceeding. The debtor may pay up or negotiate an instalment payment once he or she has received a demand notice.
LIMITATION TO AN ACTION FOR A DEBT RECOVERY
It is worthy of note that an action for debt recovery is one that has a limitation i.e. an action for debt recovery will be statute-barred if it is not brought on time. The Limitation of Statute Law provides in Section 18 that an action for recovery of debt cannot be brought after 6 years. This means that the law will not allow an action against a debtor if such action is not brought to court within the span of 6 years from the day in which the action arose. It is clear from S. 20 (1) (a) of the Limitation of Statute Law that 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. S. 12 (c) states the consequences of the failure to comply with S.20 (1) (a) of Act. It is stated clearly that the right of action shall cease to exist and therefore not be exercisable after the expiration of the 6 years as was held in the case of Okonta & Anor V. Egbuna (2013) Lpelr-21253(Ca)
In concluding, we should also point out that self-help is not advisable as the court frowns at extra-judicial measures at debt recovery. Self-help may include the use of threats, violence, malicious destruction of the debtor’s goods or property, or the arrest and detention of debtor by the Police. With the use of self-help, a debtor may successfully prosecute an action for the enforcement of his fundamental rights and for the award of punitive compensatory and monetary damages against the creditor. Thus, it is always advisable to follow due process when trying to recover a debt.
However, where debt is accrued through a commission of a crime, which includes entering an obligation by dud cheque; fraudulent misrepresentation; or advance fee fraud, the creditor may institute a criminal complaint against the debtor with the Nigerian Police Force or Economic and Financial Crimes Commission(EFCC).
By Litigation, Arbitration & Disputes Resolution Team at Resolution Law Firm
Email: [email protected]