Why you should wait for six years before filing for debt recovery

In every business transaction, especially in lending facilities the tendency to have disagreements or breach due to a party refusing to pay what is owed is high. And often, this has led to greater issues; failure of business venture, breakdown in relation as well as disturbance of peace and even threat to life among so many other fallouts.

However, no life or business has to be lost in such a situation as the law already envisaged this and has made provisions for debt recovery through legal methods.

There are certain lawful provisions and options to recover debt in Nigeria. These include publication of debtor’s refusal in the newspaper, agreement between parties especially when it involves payment from one party to the other as agreements make it easy to recover debt without arguments. Also, there is the option of litigation because the court has the power to hear and determine an action for debt recovery and enforce payment against a stubborn debtor.

That these provisions exist does not however mean that in certain situations, they will not be ineffective; there is limitation to an action for a debt recovery and this is based on the fact that it is statute-barred and therefore cannot be pursued if it is not filed before the court on time. The Limitation of Statute Law provides in Section 18 that an action for recovery of debt cannot be brought after six years. As a result, the law will not allow an action against a debtor if such action is not brought to court within the span of six years from the day in which the action arose.

Consequently, from the provisions of Section 20 (1) (a) of the Limitation of Statute Law, an action on a simple contract for recovery of debt must be brought to court within six years from the date the cause of action accrued.

There is a caveat in Section 12 (c) that the consequences of the failure to comply with Section 20 (1) (a) of Act means the right of action shall cease to exist and therefore not be exercisable after the expiration of the six years.

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