If you’re an entrepreneur, you’ve probably had that one customer, or maybe multiple customers, who owes you and provides you with a million excuses. You’ve called, texted, even dropped by their store, and nothing happens.
Or maybe you’re a person who lent cash to a friend, colleague, or family member, and now the individual has somehow “gone into hiding” or refuses to pay you.
If any of these situations sound familiar, this article is for you.
In this guide, we’ll explain the legal steps to recover your money or debt in Nigeria quickly, safely, and effectively without putting yourself in legal trouble.
First Things First: Don’t Take the Law into Your Own Hands
You should never resort to self-help.
Going to your debtor’s house, threatening them, or sending intimidating messages can backfire badly.
Not only could it damage your case, it could land you in trouble over harassment, intimidation, or assault.
Nigeria’s law provides a solid template to help you enforce your rights in a secure and legal fashion.
Step 1: Check if There’s a Written Agreement
If you have a written agreement with the debtor (e.g., a contract, loan agreement, or invoice), start there.
Well-drafted agreements typically contain a debt recovery or dispute resolution clause, outlining how to handle non-payment such as mediation, arbitration, or litigation.
Follow the conditions specified in that agreement before doing anything else.
If you don’t have a written agreement, don’t worry, you can still reclaim your money legally.
Step 2: Send a Formal Letter of Demand
If there is no agreement in writing or the debtor still does not pay, the next legal remedy is to issue a Letter of Demand.
A Letter of Demand is an official legal letter drafted to notify the debtor that he/she owes you money and must pay it within a specified time.
The letter must include clearly:
1. The debtor’s and your address and name.
2. The amount owed and for what.
3. The deadline for payment.
4. The steps you’ll take if payment is not made such as legal action.
It’s best to send the letter through a reliable courier service or registered delivery so that the debtor signs for it. This provides proof of receipt which is valuable if the matter ends up in court.
A properly written Letter of Demand proves that you’re serious about recovering your money it also lays the foundation for a court case if the debtor continues to deny you.
Step 3: Ask a Lawyer to Take Legal Action
When the debtor still refuses to pay after receiving your Letter of Demand, it’s now time to hire the services of a lawyer to pick up the case.
Your lawyer will:
- Review your documents, communications, and evidence.
- Attempt professional mediation or negotiation.
- Sue for a civil action for debt recovery in court if the above does not work.
For undisputed capital debts, it is straightforward and expedited especially in Lagos, Abuja, and other states with efficient rules of civil procedure for that purpose.
Bonus Tip: Always Document Your Transactions
To avoid unnecessary stress, always:
- Use written contracts or receipts for business transactions and loan transactions.
- Keep records of bank transfers and WhatsApp or email communications.
- Alert your lawyer to draft or review agreements before disbursing money.
It is frustrating to get money back from a person who refuses to pay but you do not have to break the law or lose your cool.
With legal advice, you can get your debt recovered safely, within a short period, and legally.
At Olamide Oyetayo & Co., we help clients all over Nigeria recover delinquent debts, draft demand letters, and institute court proceedings if necessary.