If you are currently operating your own business or even if you’ve personally given friendly loans to someone, you probably have experienced difficulties in getting back what is rightfully yours. Often times even friends or family members can easily choose not to pay and all you are left with is a feeling of emptiness and perhaps a series of unresponded text messages sent to your debtor. So what can you do?
For debt below 5k.
For any claims or demands below 5k, there is no need to go for a full-blown trial, instead, make your way to the nearest Subordinate Court (which means either Magistrate or Sessions Court), proceed to the Registry and request for a small claims form. The court officers will also be able to advise you on the steps and documents which is needed to be prepared.
Small claims court is useful as the procedure is generally straightforward and the cost of bringing an action here is relatively cheap compared to a normal civil suit.
For claims above 5k.
For debts above the 5k threshold, the matter cannot be heard in the small claims court and instead it has to be heard at the normal Magistrate Court (debt up to 100k), Sessions Court (debt up to 1 Million) or the High Court (debt more than 1 Million). The general procedure is to first issue a Letter/Notice of demand to the debtor. Based on my experience, many cases are unable to proceed at this stage due to the lack of details such as (Name, address, etc) in order to send the said letter. The rule of thumb in lending money or even in doing business is to ensure that a copy of the Individuals IC or the Company’s SSM is taken in order to ensure you will be able to track down your debtor.
If the debtor fails to make payments after the issuance of the Letter, you can draft a Statement of Claim which should state the parties involved and the nature of the suit. A Statement of Claim will be filed together with a Writ in the court usually chosen based on where the cause of action arose. The defendant will then be required to make an appearance within 14 days.
-If Defendant makes an appearance
If the Defendant makes an appearance, they will have to file their Statement of Defence which you will then need to reply to. Once the replies are complete, the matter will be brought to trial where each party will adduce witnesses and evidence to support their claims.
If you have proper documentation on the debt, you will be able to proceed with a Summary Judgement Application which can bypass the need for a full trial and save you a lot of costs.
-If Defendant does not make an appearance
If the Defendant does not make an appearance after 14 days of you serving the Writ and SOC to the Defendant, you can then proceed to make an Application for Judgement in Default of Appearance and the court will then enter judgement in your favour.
Paper Judgement.
The method explained above merely leads you to obtain a paper judgement. A judgement is essentially a court order confirming that the defendant is indeed indebted to you. But the Defendant is still refusing to make any payments to you, what was the point of all the above?
Once you have a judgment, you can then proceed to enforce the said judgement on the Defendant. Some methods include garnishee proceedings where a person makes an application directly to the Debtor’s bank for the bank to pay you the money regardless of the Defendant’s consent. This only works if you are able to identify the location of the Debtor’s bank account and if that account has sufficient funds to pay your debt.
Another common method is to issue a Writ of Seizure and Sale which is where you directly go after the Debtor’s assets in order to sell them off and the proceeds of the sale will be used to satisfy the debt.
If the debt is above the 50k threshold, you can of course go for bankruptcy proceedings against an individual or winding-up proceedings against a Company.
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