Debt recovery is one of the most difficult issues to handle because it all comes down to the willingness of the debtor, and if this willingness is not in view, then it becomes a battle involving many paper works when the due process is followed.
Image source
Before now, I used to think that retrieving the money loaned out was very easy, but hey, it's never an easy approach at all, especially when the debtor is a chronic level.
That's exactly why we are always admonished to loan out what we can afford to lose, and this rule is only applicable to individuals willing to help out friends and it's in no way related to loan companies.
Don'ts in debt recovery
I don't know about other countries, but here in my country Nigeria, there are a lot of approaches we take in debt recovery that the law frowns at and most of us still don't know because we haven't been charged. I got this knowledge when listening to a radio program on debt recovery process.
Some of the don'ts are as follows;
- Involvement of security agents like police:
Police are never debt recovery agents. This is one approach that a lot of us have been mis-taking, and it's against the law. It's so bad that even the police do not follow this law, even though they know that it's never their duty...maybe they do it to fatten their pockets or to claim 'workaholic' title.
A well learned debtor being harassed by an hired police can go ahead and sue both the creditor and the police, and they'll greatly pay for the outcome.
The only manner in which police are to be involved in a debt issue is when a crime is attached to the debtor; say, maybe the debtor was involved in robbery or fraud with the money borrowed.
- No abuse or harassment
When I came across this, I got weakend, because how do I make my stubborn debtor come back to his senses quickly? I have a series of debtors that I've always wanted to shout at, to make them feel ashamed of their bad habit of refusing to pay back a loan I sympathetically gave them, but the thought of getting filed for a case for that always gets me to stay calm.
The approach of harassing a debtor over here in Nigeria is very common, and these debtors oftentimes don't pick it because most of them don't know the law against it.
Sometime last month, a grocery shop owner in my street harassed a young man with loud shouts, dragging in his trousers as a way of retrieving her money. A lot of people gathered, and it was so embarrassing to the young man. It's so bad he doesn't know that he can sue the woman (the creditor) for the harassment.
- Seizure of the debtor's property
There's nothing seizure of the debtor's property; anything in this approach is punishable by law.
I know you may want to ask, "What if the item is used as collateral?" Even if the item was used as collateral for the loan, it's never the right of the creditor to go and seize the property. It's the duty of the law to carry out that act.
Even when the item is as tiny as a needle, seizing such property will attract a fine if only the debtor knows his rights.
So maybe someone is owing you money, and you feel the right step to take is to seize his phone. Nah, you'll pay for it when charged.
- Use of thugs or violence
This may sound funny, but it happens. A lot of creditors hire boys to go and treat the f^ck up of their debtors, especially when the debtor has proven stubborn or in a case whereby the debtor seems to be the oppressor.
It's never the right step to take.
So how do you go about retrieving debts?
It's the law; yeah, get the court involved.
Thanks for reading.