Tips On Recovery Of Debt


As far as there is live there must be creditors and debtors; although the occupation of such status may not be static. Everything in life is about sustaining life, itself. The basic needs of man and his wants have given rise to business and work; henceinter human relationship. At different times, places and circumstances people owe themselves. What is owed is called debt, while the person owing is called Debtor and the person owed is a creditor. Most times debtors forget their pretentious innocence and plea rather refuse to pay back their debts. Hence, creditors engage self-help, voodoo, law enforcement agents and diabolic means in a bid to regain their hard earn wealth; it is often frustrating and wasteful. Theall encompassing Nigerian law and jurisprudence has provided expeditious, reliable and legal means of recovering debts with ease and not infringing on the inalienable human rights of debtors. This paper will help you know what is really a debt, how to safeguard and recover a debt.



In the strict sense of law, “Debt” is a sum of money due by a certain and express agreement.  (Black’s law Dictionary 6th edition). Recently, the court held debt to be an amount that has been agreed by parties, certain, fixed or capable of being calculated among them. See, Hon. Justice Sotonye Denton-West V. Chief (Ichie) Chuks Muoma, SAN (2010)2 NWLR Pt. 1177.



Many have lost out in trials over recovery of debt because what they sought was never a debt in the eyes of law. For there to be a debt there are salient elements that must be present.

In every true debt there must be a debtor and a creditor. The both must be in an agreement on the debt whether written or unwritten. A debt agreement should show a wilful and consensus contract between the parties to it over payment of a certain or calculate-able sum of money. The legal due date for payment of debt should be provided. The court honours agreements between a creditor and his debtor in ascertaining debt.  Such agreements should be made in the presence of witnesses. It is advised that debt agreements should be written for clarity of intention of parties.  

A debt must be certain, specific, actual and known. It must be a calculate-able; a known sum of money.



There are several legally provided means of recovering debts without violating the rights of the debtors and endangering the liberty of the creditor himself. 

Hear this, the Nigerian Police Force and all other security outfits are not agents for recovery of debts. Rather they are for the protection of lives and property and will come into picture where there is a criminal offence. None payment of debt is at worst a breach of contract (a civil case) and not in any colour or stature within the constitutional jurisdiction of Police. The use of police to threat, arrest and detain debtors and force them sign undertakings to pay to police who would in turn pays same to the creditor is an abuse of institution and a flagrant intimidation of ignorant debtors. A creditor should be careful because a debtor can sue him and his cohorts for assault, battery, false imprisonment, fraud and claim damages way above his debt. The place of religion in the African society cannot be overlooked; many creditors utilise same to recover their debts even as some debtors unbelievable pray for debt cancellation. Well, it is to each according to his faith; but any means that jeopardises the rights of debtor is illegal and unacceptable. A creditor should talk to a lawyer instead of getting mad.          


Alternative Dispute Resolution:    

Creditors and debtors are often friends, associates, colleagues, partners and relatives; most sane heads don’t lend to strangers. In a bid to sustain good relationships; creditors and debtors are encouraged to embrace dispute settlement options outside the courts. A smart creditor does not need the aid of a third party to recover his wealth when he engages Negotiation. He will speak to the conscience of the debtor and in return have debt paid. A creditor that is not a good negotiator can get a Mediator (a third party) to arrange settlement meetings between him and his debtor. A good ground to facilitate debt payment modality. In extreme cases, parties to a debt agreement can appoint arbitrators to hear them and help them reach a binding conclusion. Unlike litigation this whole process is faster, less expensive and sustains good relationship among creditors and debtors.     



The Nigerian courts among other things are established for the determination of any question as to civil rights and obligation of persons/government. Upon the above premise, cases of breach of debt agreements are entertained in the courts. This is often advised to be used when the first option (alternative dispute resolution) has failed. Here a creditor has to appear in person or through his lawyer before a court to seek for the recovery of his debt.

For expeditious justice, the courts have invented a special procedure for the recovery of debt, known as Undefended List or Summary Judgement. The procedure requires the creditor (claimant) to state his case of debt and believe that the debtor has no reasonable defence.



An old adage urges men never to lend to those they can’t fight. Well, that is unlawful. A creditor can result to self-help to recover his debt. He may take over the property of the debtor until his debt is recovered but all must be done in a manner that would not injure the plaintiff.  Where a creditor has access or is in possession of other monies of his debtor, he can resolve to such. A creditor can set off a debtor’s debt, where he (a creditor) is equally indebted to the debtor, except for the balance of such.      



There is a time for everything under the heavens; a time to seek for recovery and a time to forgo recovery. The law expects all to be awake to their rights and dealing thereto. No matter how much a creditor is owed, there is time for him to recover or at least take actions to recover such debt else the law will deem his right to such debt to have elapsed. In such case the debt will become a statute-barred debt. For clarity purpose, here are some limitations to the time within which actions and arbitration can be taken in different circumstances.

1)    A debt emanating from a case of simple contract, quasi-contract cannot be entertained by the courts after the expiration of six years from the date on which the debt became due and actionable.

2)     Where a debt has been resolved under arbitration and the arbitration agreement has no seal, the arbitration award cannot be brought before any court after the expiration of six years from the time the cause of action arose. For an arbitration agreement under seal it shall be after the expiration of twelve years.   

3)    A debt that arose as a penalty or forfeiture cannot be recovered through a court after the expiration of six years from the date the debt became due.

4)    A sum owed to a registered company by a member (shareholder) of the company as stated in the articles of association of the company, cannot be recovered from such shareholder after the expiration of six years from the date his debt became due. Where the article of association of the company is sealed, it shall be after the expiration of twelve years.

5)    An action for account or recovery of Seaman’s wages cannot be allowed in any court after the expiration of six years from the date such became due.

6)    Please be guided that, no case of arrears of interest in respect of a debt shall recovered after the expiration of six years from the date on which the interest became due.

7)    A principal sum of money secured by a mortgage or charge on land or on any movable property (other than ship) cannot be recovered after the expiration of twelve years from the date when the right to recover such sum accrued. Where the mortgage is sealed it shall be after the expiration of twelve years.  

The above limitations are sacrosanct and fundamental; no court whatsoever will entertain a case for recovery of debt when such debt is statute-barred. Else such trial will be a sheer waste of judicial resources. Indolent creditors are warned never to sleep on the right to recover debt be embarking on timely arbitration or litigation.

Man was not made for law rather the law for man. To avoid being shut out by the Limitation Act, there are certain steps that a creditor may embark on to have an extension of time within which to institute an action for recovery of time.


a.     Acknowledgment of Debt

A creditor can have his debtor acknowledge his debt. That is, a debtor reaffirming that he owes the creditor a given sum of money. Once a creditor obtains an acknowledgement of debt his right of action is deemed in law to have started from the date of the acknowledgment. Hence, every acknowledgement offers the creditor another set of years to exercise his right not minding the time already spent by the creditor. It renews time within which debt is to be claimed. Often times, a creditor needs to write a debt reminder on his debtor to prompt such acknowledgement from his debtor. An acknowledgment must be written and signed by the debtor or his agent and addressed to the creditor or his agent.


b.     Part –Payment of Debt

Part-payment of debt by a debtor affords more time to his creditor. Once a part-payment is done, the creditor is deemed to have a right to action from the day of the part payment and no longer from the day such debt became due. Such payment may be made by the debtor or his agent to the creditor or his agent. For more on limitations see the Limitation Act, 1966. Cap 522 LFN (Abuja)


The above presentation is to ease recovery of debt; the option is to have all debt and repayment agreements written and signed by the creditor and debtor. If a creditor is a certified and licensed moneylender, then the issue of writing and signing of debt agreement is more imperative. For if a moneylender enters in to a contract for repayment of debt and such is not written and adequate signed, the contract cannot be enforced. Note further that any individual whatsoever, who lends money at interest or who lends a sum of money in consideration of a larger sum being repaid is presumed a money lender until the contrary is proved. Hence, certified and licensed moneylenders as well as individual that lent on interest or for a larger sum are shut out of oral debt agreements. See, section 13 (1) of the Moneylenders Act, 1939. Cap 525 LFN (Abuja) and the Moneylender’s Law of Lagos State. Cap. M7. 


Conclusively, a good debt agreement should contain all the terms of the agreement no matter how ignorable. It should contain the date on which money was lent, the sum lent, where by cheque the bank name and branch and the cheque number is required, the agreed interest or rate and the due date for payment of debt. With all these, am sure debtors have known the limits of creditors while creditors have known their rights and safety measures. They all are to promote peaceful human co-existence and economics.

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Onyekachi Umah

Onyekachi Umah is a private Legal Practitioner with amazing experience in human right, criminal law and civil law including; pre-trial detention, human rights enforcement, intellectual property, transaction and regulation advisory, corporate, commercial, investment law and energy law as well as litigation and arbitration arising from them. He is a Legal Awareness Expert and also a Certified Arbitrator both in Nigeria and the United Kingdom. He is a member of the Chartered Institute of Arbitrators (UK) and a Certified Conflict Management Practitioner and Negotiator. He is a member of prestigious “Young ICSID” of International Centre for Settlement of Investment Disputes (ICSID), Washington DC. Among other, he has a certificate in Law of Contract from a program of Harvard University, a certificate in International Environmental Negotiation from United Nations Institute for Training and Research, Geneva and recently, a certificate in Conflict Management from United States Institute of Peace, Washington, D.C. He also holds a master of laws degree and he is a doctoral student at the faculty of law, NSUK. 

Onyekachi is the managing partner of a leading law firm; Bezaleel Chambers International. He is the founder and President of a free law awareness platform known as that promotes awareness and understanding of rights and laws of Nigeria (#SabiLaw) and offers free daily law tips (#DailyLawTips). Understanding the challenges of Administration of Criminal Justice in Nigeria, he dedicates his daily law tips every Mondays to promoting Criminal Justice (#CriminalJusticeMonday). Recently, he started a new series on Election Laws tagged (#SabiElectionLaws) to increase legal awareness on elections laws, policies and regulations in Nigeria. He is the convener of the Sabi Law Lecture Series (#SabiLawLectureSeries), travelling around Nigeria delivering free law awareness lectures. He also organises and sponsors a quarterly competition, titled "Sabi Law Video Challenge" (#SabiLawVideoChallenge) where Nigerians win money (over $130.00 per winner) for making videos of themselves talking on any law or right as a way to promote law awareness and have fun. To further promote legal awareness among Nigerians across the world, he started a law awareness show titled "Sabi Law With Onyekachi Umah, Esq" (#SabiLawWithOnyekachiUmahEsq) showing on social media platforms via @LearnNigerianLaws.   

Mr. Umah has written over Four Hundred (400) free to access articles and materials on law with a desire to enlighten the public. He is also on the board of companies and non government organisations. Among others, he is serving as a member of the Advisory Committee for Law Clinics Partnership for Reforming Pre-trial Detention in Kuje Prison Project funded by the United States Department Bureau for International Narcotics and Law Enforcement. He is an executive member of the Pre-Trial Curriculum and Handbook Review Committee. For more selfless service, is a member of the Rotary Club of Abuja, Metro (RCAM), District 9125. He was featured as the Legal Personality of the Week by This Day Newspaper (a leading national newspaper) on its September 11, 2018 edition and was also featured on the as the Legal Personality of the Week on November 14, 2018. He has won several honours and awards for his innovative legal practise across the world.



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