Abdul Muhammed Law Practice
Abdul Muhammed Law Practice presents an overview of the types of documentation that a debt buyer like the Asset Management Corporation of Nigeria (AMCON) would typically need to provide to substantiate the validity of a debt.
This article also discusses the debtor’s rights to request such documentation from AMCON.
Loan agreement or facility Letter
One of the primary documents that a debt buyer must possess is the loan agreement or facility letter. This document outlines the terms and conditions of the loan, including the principal amount, interest rate, repayment schedule, and any other relevant terms. It serves as the foundational document for the debt.
Promissory notes or debentures
Depending on the nature of the debt, promissory notes or debentures may be involved. These are written promises to pay a certain sum of money on a specified date and contain essential details about the debt.
Security documents
If the debt is secured, such as by a mortgage over real property or a pledge of assets, the debt buyer should provide copies of the security documents. These documents will describe the collateral securing the debt and the conditions under which the lender can exercise its rights in the event of default.
Payment records
Payment records, including statements of account and transaction histories, are crucial for substantiating the debt. These records demonstrate the debtor’s payment history and can be used to calculate the outstanding balance.
Assignment agreement
If the debt has been transferred or sold to AMCON by the original creditor, an assignment agreement should be provided. This document establishes the legal transfer of the debt from the original creditor to AMCON.
Default notices and demand letters
AMCON should provide copies of any default notices or demand letters sent to the debtor, indicating that the debtor has defaulted on the loan and the amount outstanding.
Communication records
Correspondence between the debtor and the original creditor or AMCON regarding the debt can be important. This includes emails, letters, and any other written communication related to the debt.
Court orders or judgments (if applicable)
If legal action has been taken against the debtor and a court has issued orders or judgments related to the debt, these documents should be provided.
Debtor’s rights to request documentation
In Nigeria, debtors have certain rights when it comes to requesting documentation to substantiate the validity of a debt.
Right to information
Debtors have the right to request information and documentation related to their debt. They can ask for copies of the loan agreement, payment records, and any other relevant documents.
Verification of debt
Debtors can request that the debt buyer or creditor verifies the debt by providing detailed information about the debt’s origin, including the name of the original creditor and the account history.
Dispute resolution
If a debtor disputes the validity or accuracy of the debt, they can seek dispute resolution through legal channels, and the creditor or debt buyer must provide evidence to support their claim.
Protection from harassment
Debtors are protected by laws that prohibit harassment and unfair debt collection practices. They have the right to be treated fairly and respectfully by debt collectors.
Conclusion
It’s important for both debt buyers like AMCON and debtors to understand their respective rights and obligations regarding debt documentation. Transparency and adherence to legal procedures are essential to ensure fair and lawful debt collection practices in Nigeria.
READ: Guide for corporate witnesses.
