Debt Recovery & Human Rights

By Ubong S. Ebong Esq. -
Another prevalent issue in our society is that of debt recovery. Unsurprisingly, there are a lot of challenges in this area which often  result in human rights issues. Therefore it's important to be well guided to avoid suffering or unknowingly inflicting human right violations because ignorance is no justification in the eyes of the law.

In the context of our discussion today, a loan is simply money given by one person (called the creditor) to another person (called the debtor) for temporary use, to be repaid with or without interest. Usually, there are 2 kinds of creditors/lenders, namely:
1) commercial money lenders who are registered under the money lenders Act & carry on money lending activities as their official business. Examples are banks & some co-operative societies.
2) Private creditors who are just ordinary people or organisations that lend money based on personal or other reasons & not as a regular commercial activity.
Both classes of creditors are entitled to charge interest based on the contents of their agreements with the debtor.

Now let's delve into the significant part of this discussion: how to protect the economic & fundamental rights of both the creditor & the debtor. The creditor, just like every other person, has an economic right to engage in lawful commercial activities for value. He also has a contractual right to recover his loaned money based on the terms of whatever loan agreement he has with the debtor. In simple & clear terms, the best way to protect his economic & contractual right is to enter into a valid binding contract with the debtor which will spell out the terms of the loan including the details of repayment as agreed by both parties. The services of a legal practitioner is highly advisable in this regard to check errors & all other possible loopholes. Where there is default in repayment contrary to the terms of the loan agreement, the law has made adequate provision for the creditor to enforce his right to recover his money through the court system either through the 'undefended list' procedure (for non-contentious cases) or through litigation (for contentious cases) or through any of several alternative dispute resolution (ADR) mechanisms which provide a quicker, easier & cheaper way of resolving disputes outside the formal courtroom setting.

For the debtor, due to the unpleasantness of his position, the law also provides adequate safeguards to protect his rights because he is after all only a debtor & not a slave to the creditor. As earlier stated, the law has stipulated that debt recovery should be effected through the judicial system & this is so to avoid abuse of the debtor's legal rights. CONSEQUENTLY, IT IS UNLAWFUL TO USE THE POLICE OR ANY OTHER SECURITY AGENCY OR THUGS OR PHYSICAL VIOLENCE TO RECOVER DEBTS! A creditor who resorts to using any of the above will be liable for any damage that results from his actions. The only legal ways of recovering debt is either through court proceedings (undefended list procedure & general litigation) or alternative dispute resolution proceedings (at the multi door courthouse or by any other recognized arbitrator).

Before I conclude let me quickly emphasize 3 scenarios:
1) Where a creditor engages the police or any other security agency to recover a debt, & such agency arrests, detains and/or tortures the debtor.
2) Where after involving the police, the police goes further to charge the debtor to court on a false charge/accusation, usually fraud, just to teach the debtor a lesson.
3) Where some creditors just resort to violence either by themselves or through the use of thugs. Such conduct is a crime itself for which the creditor & his accomplices can be arrested & prosecuted.
In all the above instances, the debtor has the right to sue both the creditor & the police or other accomplice(s) of the creditor. Based on the facts of the case, he could sue for false imprisonment, assault, malicious prosecution, defamation, human rights violation etc.

I understand that it is painful to be owed money & not be payed by your debtor. But owing debts is not a crime & should never involve the police unless the money was obtained from you fraudulently which would make it a criminal matter. Otherwise, get a lawyer to recover ur debt in the lawful way. There are interesting cases where the debtor ended up suing his creditor & getting a monetary compensation which was equal to or even greater than the debt owed. There are also instances where creditors end up breaking the law while trying to recover debts which landed them in jail or even worse.

Please be guided.

#KYR


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