An overview of the legal framework and practical steps for corporate entities to recover outstanding debts in Nigeria.
Unpaid invoices can paralyze business operations. While diplomacy is preferred, businesses must understand the legal routes available for recovering debts without violating commercial regulations.
Steps to Legal Debt Recovery
- Send a Letter of Demand: A formal letter written by a legal practitioner demanding payment within a specified period (usually 7 to 14 days), warning of legal action.
- Alternative Dispute Resolution (ADR): Engaging in arbitration or mediation, which can resolve disputes faster than courtroom trials.
- Filing a Summary Judgment Claim: In cases where the debtor has no defense, a summary judgment or "Undefended List" procedure can secure a rapid judgment.
It is crucial to preserve all contracts, invoices, and correspondence as they form the primary evidence in debt recovery claims.