WHAT TO DO WHEN YOU NEED TO RECOVER A DEBT
DEBT RECOVERY AND ENFORCEMENT
Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. Debts arises as a result of non-liquidation of loan advances within the agreed time or for failure to settle unpaid accounts for goods and services supplied, etc.
If a person or an organization owes you money and has refused to pay their debts, there are various ways of recovering such debts. This will depend on the size of the debt and your ability to prove that you are owed the money.
Sometimes, debts can be recovered, through a simple letter of request for the amount owed, this is the very first step in debt recovery and can be done through a solicitor. Upon consultation with a Lawyer, the Lawyer would write a letter to the debtor demanding the funds owed, warning about dire consequences if the payment is not received on or before a stipulated date, this is called a "letter of demand" and usually 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, if these doesn't work, or there is a dispute as to the debt, mediation could be used before taking the matter to a competent court to decide.
On the blog today, we would be focusing on ways of enforcing monetary judgments to recover debts, however, it is also important to state what you should never do whilst trying to recover a debt owed you.
Failure of debtor to liquidate any overdue debts is a civil wrong and not a criminal offense under the law. At such, the Police and other security agents have no power whatsoever to arrest, prosecute or to take any action against a debtor for failure to pay debts. Therefore, it is important that you do not resort to self-help as the court frowns at extra-judicial measures of debt recovery. This may include the use of menacing threats, violence, destruction of goods or property, and/or the arrest and detention of debtor by the Police. Doing any of these may expose you to liabilities for assault, battery, unlawful detention, false imprisonment, constitutional rights abuse, and the debtor may successfully prosecute an action for his fundamental rights enforcement and for the award of punitive compensatory and monetary damages against you, which may exceed the outstanding sum of debt you are claiming.
Monetary judgments are usually enforced in one or more of the following ways: Writ of Fieri Facias, Garnishee proceedings, Judgment summons and Writ of sequestration.
1. Writ of Fieri Facias
This is an order directing an enforcement officer to seize and sell goods belonging to the judgment debtor (the person ordered by the court to pay money to another party) in order to satisfy the judgment debt. This is also known as Writ of Fi.Fa or writ of attachment and sale and cannot be issued until after 3 days from the day the judgment was given except with leave of court. There are conditions for issuing the writ of fifa and they are as follows :
2. Jugement Summons
Judgment summons cites the defendant to appear personally in court, and be examined on oath as to the means he has, or has had, since the date of the order or judgment made against him, to pay the same, and to show cause why he should not be committed to prison for his default. This is usually resorted to where the judgment debtor has the means but has refused to pay. If the judgment debtor refuses to attend Court or intends to abscond to avoid being examined on oath, the court may issue a warrant for his arrest and detention. After investigation, the court may make any of the following orders: commit the judgment debtor to prison, order for the attachment of the judgment debtor’s property, order for payment in installments.
3. Garnishee Proceedings
This is a judicial proceeding in which a creditor asks the Court to order a third party who is indebted to a debtor to turnover to the creditor any of the debtor's property in possession of that third party. The Garnishee Proceedings is sui generis that is, of its own kind and it comprises mainly of two stages:
4. Writ of Sequestration
A writ of sequestration is a prejudgment action that allows the court to seize or attach property or assets on behalf of the judgment creditor. This writ directs sequestrators appointed by the court to enter the immovable property of the judgment debtor, collect and keep all rents and profits thereof and or seize and detain the movable properties of the judgment debtor until he obeys the judgment. The Writ does not however vest title on the sequestrators.
In conclusion, it is important to note that an action for debt recovery will be statute-barred if it is not brought on time. Section 18 of the Limitation of Statute Law provides 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.
Tell us in the comment section what other methods you have used to recover debts owed you, we would also love to answer whatever questions you might be having as regards, debt recovery and its enforcement.
When talking about debts, is there like a category of this debt? For example, someone borrows as low as 5k from your hands and refuses to pay back, does one require a law enforcement to collect such low amount of money? Or is the writeup just for debts worth millions of naira? A poor man won't have that luxury of going through the law to get money that belongs to him. In summary, my question is does the various ways of enforcing debt recovery cover the poor man?
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