Abdul Muhammed Law Practice
Abdul Muhammed Law Practice explores strategies that provide debtors with valuable insights on how to protect their assets and navigate creditor actions.
Introduction
Facing financial distress is a challenging situation, especially when creditors such as the Asset Management Corporation (AMCON) are pursuing the realization of your business or personal assets.
In Nigeria, creditors often employ various strategies to recover debts, such as foreclosure and the appointment of receivers.
Foreclosure
Creditor strategy
AMCON may initiate foreclosure proceedings to recover outstanding debts secured by property, typically real estate.
Debtor’s counter move
Engage with the creditor and explore options for negotiation or restructuring to prevent foreclosure. If possible, consider refinancing or selling non-essential assets to meet debt obligations.
Appointment of receivers
Creditor strategy
AMCON may seek the appointment of a receiver to manage and liquidate assets, often in business insolvency cases.
Debtor’s counter move
Proactively engage with AMCON to demonstrate commitment to resolving the debt. Propose a repayment plan that allows continued business operations while gradually repaying debts.
Negotiation and settlement
Creditor Strategy
AMCON may be willing to negotiate a settlement to recover a portion of the debt.
Debtor’s counter move
Engage in transparent negotiations. Provide evidence of financial hardship and propose a reasonable settlement amount. Ensure that any agreement is documented in writing to avoid future disputes.
Legal defense
Creditor strategy
AMCON may pursue legal action to enforce debts.
Debtor’s counter move
Seek legal advice immediately. Challenge any inaccuracies or procedural errors in the creditor’s claim. Present evidence of good faith efforts to repay and explore options for out-of-court settlements.
Asset valuation
Creditor strategy
AMCON may undervalue assets to expedite their sale.
Debtor’s counter move
Obtain independent valuations for your assets. Challenge any undervaluation that is not in line with market standards. This ensures that assets are sold at fair prices.
Preserving essential assets
Creditor strategy
AMCON might target valuable assets that are essential for business operations or personal well-being.
Debtor’s counter move
Identify and declare essential assets that should be exempt from creditor actions. Consult with legal experts to understand the protection available under Nigerian law.
Leveraging mediation
Creditor strategy
AMCON may be open to mediation as an alternative to costly legal proceedings.
Debtor’s counter move
Suggest mediation as a way to reach a mutually beneficial solution. Mediation allows for open dialogue and creative solutions that benefit both parties.
Specifically propose an agreement to enter into quick non-binding mediation.
Dispute debt validity
Creditor strategy
AMCON may pursue debts without sufficient evidence or documentation.
Debtor’s counter move
Request validation of the debt. If the creditor cannot provide proper documentation, dispute the debt’s validity.
Bankruptcy consideration
Creditor strategy
AMCON may threaten bankruptcy proceedings to pressure debtors.
Debtor’s counter move
Explore the option of bankruptcy as a last resort. Understand the implications and seek legal advice on alternative methods of debt resolution.
Conclusion
Navigating creditor actions and safeguarding assets in Nigeria requires a combination of proactive communication, negotiation skills, legal understanding, and knowledge of your rights as a debtor.
Engaging with AMCON, seeking professional advice, and exploring available alternatives can empower debtors to protect their interests and preserve their business and personal assets during challenging times.
READ: Legal boundaries in debt collection communication practices by online creditors in Nigeria
