Abdul Muhammed Law Practice
Abdul Muhammed Law Practice provides a DIY guide for a bank debtor that has to handle a creditor trying to collect on debt owed in Nigeria on his own without a lawyer.
Introduction
Facing a creditor trying to collect a debt can be a daunting experience, especially if you cannot afford legal representation.
In Nigeria, understanding your rights and taking proactive steps can help you navigate this challenging situation.
In this DIY guide, we will explore how you can help yourself when dealing with a creditor trying to collect a debt without the assistance of a lawyer.
We’ll also delve into background issues that may affect bank debtors in Nigeria.
Know your rights and obligations
Understanding your rights and obligations as a debtor is crucial.
In Nigeria, the legal framework for debt collection is primarily governed by the common law and specific statutes such as the Banks and Other Financial Institutions Act (BOFIA), the Asset Management Corporation of Nigeria Act, the Central bank of Nigeria Act and the Consumer Protection Act.
Limitation period
Debtors should be aware of the limitation period, which is typically six years in Nigeria. After this period, creditors may be barred from pursuing legal action to recover the debt.
Debt validation
You have the right to request validation of the debt from the creditor. Ask for proof of the debt, including the original loan agreement and a breakdown of the outstanding balance.
No harassment
Creditors must follow legal procedures when attempting to collect a debt. They are not allowed to harass, threaten, or use abusive language.
Open communication with the creditor
Maintaining open and honest communication with your creditor can often lead to a mutually acceptable resolution.
Here’s how:
Negotiation
Contact the creditor and explain your financial situation. You may be able to negotiate a payment plan or a reduced settlement amount.
Documentation
Always keep records of your communications with the creditor, including letters, emails, and phone call logs. This documentation can be valuable if a dispute arises later.
Debt collection practices
No Unauthorized withdrawals
Creditors cannot withdraw money from your account without your explicit consent. Be cautious of signing any documents that allow automatic withdrawals.
Debt Repayment Plan
Propose a reasonable repayment plan that you can realistically adhere to. It’s important to find a balance between your financial capacity and meeting your obligations. Do not forget to write the clause ‘without prejudice’ in the heading of your letters.
Seek mediation
If negotiations with the creditor break down, consider alternative dispute resolution methods such as mediation. Your first choice should be non-binding mediation. The mediation processes can be more cost-effective only if you agree to a single mediator. This is cheaper than arbitration. Non-binding mediation gives both parties a clearer appreciation of their true situation.
Complain in writing to CBN
If you believe the creditor is engaging in unfair or unethical practices, you can lodge a complaint with the appropriate regulatory authority. For banks and financial institutions, the Central Bank of Nigeria (CBN) and the Consumer Protection Council (CPC) are relevant authorities.
Pro bono legal services
While you may not be able to afford a private lawyer, there may be legal aid organizations and pro bono services in your locality that may assist debtors with limited financial resources. Explore these options to see if you qualify for free legal assistance.
Stay informed and be steadfast
Dealing with debt collection can be stressful, but staying informed and patient is key. Keep up-to-date with changes in relevant laws and regulations, and don’t rush into agreements that may not be in your best interest.
Conclusion
Handling a bank other creditor trying to collect a debt without a lawyer in Nigeria requires knowledge of your rights, effective communication, and a proactive approach.
By understanding the legal framework, maintaining open lines of communication, and exploring alternative dispute resolution options, you can navigate this challenging situation more effectively while protecting your rights as a debtor.
READ: Debtors and credit reporting in Nigeria
Defending yourself against excessive debt claim by AMCON.
Defending yourself against excessive debt claim by your bank.
Insightful article. Thank you