25 Jun How to Navigate Debt Recovery in Nigeria

How to Navigate Debt Recovery in Nigeria

Debt is a fundamental aspect of finance either for personal use or business use and has existed for as long as humans have existed. Debt enables individuals or businesses to leverage resources they do not currently possess to achieve their goals. 

While humans use debt for different purposes, it is essential that whatever money used for debt purposes is recovered. Whether it’s taking out a loan to buy a home, financing a business, or managing cash flow for personal or corporate purposes, debt can be a powerful tool. However, debt recovery is essential. 

What is debt and what is debt recovery?

Debt: is the sum of money borrowed by one party from another, which is normally repayable with interest over a set period. It is a financial obligation that enables individuals or corporations to borrow funds that they do not already have for a variety of objectives, such as purchasing assets, covering bills, buying a home, etc.

Debt Recovery: The practice of collecting past-due payments from individuals or corporations who have failed to meet their financial obligations. This includes a variety of tactics and legal steps to ensure that the borrowed money is repaid.

In Nigeria, as the economy rapidly evolves and inflation continues to set in, individuals may find it difficult to return funds borrowed hence the need to find effective debt recovery strategies to mitigate risks and safeguard funds.

Tips for Effective Debt Recovery

1. Have accurate records

• Documentation: Ensure you have detailed records of all communications, agreements, and transactions related to the debt.
• Evidence: Your proper documentation can serve as evidence if the case goes to court.

2. Understand the Debtor’s Financial Situation

• Assess debtor’s ability to pay: Evaluate the debtor’s ability to pay. This can inform your negotiation strategy and expectations.
• Have flexible terms: Be willing to offer flexible payment terms if it increases the likelihood of recovering the debt.

3. Use Technology: Utilize software or apps such as aptResponse designed to provide you access to lawyers for issues such as debt recovery to track progress and manage cases.

Steps for Debt Recovery in Nigeria

1. Attempt amicable resolution

• Communicate directly: Start by contacting the debtor to discuss the issue. Clear communication can often resolve misunderstandings.
• Negotiation: Try to sit with the party and negotiate a repayment plan that works for both parties. Document any agreements in writing, you can do this with a lawyer on the aptResponse app available on  Android and IOS 

2. Send a formal demand letter

• Drafting the letter: Detail the amount owed, the due date, and the consequences of non-payment. Use a professional tone.
• Delivery: Send the letter via registered mail or a reliable courier service to ensure receipt and for proper documentation.

3. Engage a debt recovery agent

4. Legal Action – Try to consult a Lawyer: You can find a lawyer on aptResponse. You can consult. If amicable efforts fail, with a lawyer working with you you can file a lawsuit safely to recover funds.

Read Also: Don’t Enter Contracts Without Legal Backing in Nigeria

Navigating debt recovery in Nigeria can be a long and arduous process that can evolve into something bigger that you are thinking about.  You should not try to recover debt by yourself, seek legal help today on a platform like aptResponse.

You can also send us a mail at say-hello@aptresponse.io for more enquiries.