Services

Corporate debt recovery

If you’re unsure about which conditions and opportunities are most favorable to your corporation, that’s where our team of experts comes into the picture. We work with you to understand your business better while making tangible suggestions by the end of our debt recovery agreements.

To make sure we get it right, we follow the following process:

  • Company Review: We review your company profile and gather all relevant information about your account receivables.
  • Customer Review: Next, we look at your customers’ debts and credit histories, as well as payment and financial issues history.
  • Customized Solutions: Finally, we provide customized debt payment methods to recover your previous cash flow.

As invoices age, it becomes harder for businesses to get their hands on what they were once owed. Time is of the essence, which is why we deliver results quicker than the next closest competitor. We secure your cash flow so you can focus on running your business again.  Let us handle your debt recovery and not get worried. Contact us immediately so we can give you the best possible solution!

Debt Recovery Q&A

You may appoint a lawyer to issue a Legal Notice of Demand for the outstanding sum.

(i)         Issuance of LOD

(ii)        Filing of Writ of Summons

(iii)       Judgment

(iv)       Execution

Yes. The Creditor can resolve the legal suit with the Debtor anytime before the judgment is given by the Court. The settlement can be formalized by way of recording consent judgment in court.

The normal steps to take is commencing a bankruptcy proceeding against individual and winding up proceeding against companies. Apart from that, you may recover and execute the judgment via other methods like Writ of Seizure and Sale (“WSS”), Garnishee Proceedings or Judgment Debtors Summons (“JDS”).

(i) For individual, the Judgment Debtor (the person who owed you money) is declared a bankrupt and the asset is then divested with the Director General of Insolvency (“DGI”). The effect of Bankrupt includes being unable to be appointed as a director, his bank accounts will be closed except one account for salary payment with the permission of the DGI and the Bankrupt is also unable to travel overseas.

(ii) For winding up, it is roughly the same where the company will lose its legal status and upon winding up, the liquidator will be appointed to wind down the company. After the liquidator has traced and recovered all the assets of the company, then the liquidator will repay all the creditors their portion [based on the respective ranking of creditors on a paripassu basis (equally)].

(i) For WSS, it is among the other methods where creditors apply to the court for a writ of execution to basically seize and auction moveable assets (except personal items like clothing and tool of trade) of the creditors in the known premise of the creditors.

(ii) Garnishee Proceedings, on the other hand, is more unique as the creditor armed with a judgment of the court can obtain an order to freeze the bank account of the creditors. The order to show cause will be served on the banks who will then immediately freeze the bank account of the creditor and upon conclusion of the show cause Hearing, the Court may grant an Order Absolute whereby the creditor then has a right over these monies. It’s faster and expedient than the other methods of execution of judgment.

(iii) Charging Order, is an execution proceeding similar in nature to Garnishee Proceeding but specific to Shares held by the debtor which includes publically traded shares.

There is a method of execution called JDS which is known as Judgment Debtor Summons whereby if the judgment remains unsatisfied, then the court upon examining the debtor’s financial capability to pay, will order a repayment of the debt with a specified sum each month, some form kind of installment payment. If the Debtor defaults, the creditor can then seek for committal proceeding against the Debtor to be sent to jail. However, all cost is payable by the creditor and not the government.

The right to commence legal proceeding is always with the creditor but this have to be balanced with the commercial reality of the dispute/non-payment. If the creditor seeks to enter into a compromise, kindly ensure it is done by way of a settlement agreement outlining the terms of settlement. It’s important then when it is drafted to explicitly explain the rights of the parties and provide for a default clause.

The right to commence legal proceeding is always with the creditor but this have to be balanced with the commercial reality of the dispute/non-payment. If the creditor seeks to enter into a compromise, kindly ensure it is done by way of a settlement agreement outlining the terms of settlement. It’s important then when it is drafted to explicitly explain the rights of the parties and provide for a default clause.

Any legal proceeding must be commenced within 6 years from the date the debt accrued.

There are provisions under the debtors act or even an injunction can be sought to prevent dissipation of asset to defeat malicious act of the debtor to siphon out assets intended to defeat any potential legal proceeding to recover monies owed.

The Law dictates that the company and directors are separate legal entity which we call the corporate veil, however if the company is utilized as a mechanism to defraud creditors i.e as a sham, the corporate veil can be lifted by the court and hold the directors or any person which may include shareholder or proxies who have knowingly acted to defraud creditors, liable jointly for the debts owed in their own individual capacity

Engage with EST Advisory Management Today