PROCEDURE FOR DEBT RECOVERY IN CAMEROON-2023 APPROVED GUIDELINES

INTRODUCTION TO DEBT RECOVERY IN CAMEROON

There are various legal procedure for debt recovery in Cameroon. A debt exists where a certain amount of money is owed from one person (the creditor) to another (the debtor) due to certain agreements. Contracts are entered and executed between parties for various reasons and when there is a breach or failure for a party to perform his part of the contract, the aggrieved party can institute an action in court for recovering debts in Cameroon. Debt can also arise in loan transactions “bank debt recovery in Cameroon”.

It is important to state that the limitation period in recovering debts in Cameroon that arose from a simple contract is six (6) years excluding the year the contract was entered and executed, as provided under Section 21 (1) (a) of the Limitation of Action law. Therefore, an action for debt recovery becomes statute-barred when the limitation period of 6 years has elapsed.

PROCEDURE FOR DEBT RECOVERY IN CAMEROON

The procedure for debt recovery is contained in text like The Simplified Recovery Procedure under Law No 89/012 of 29/12/1989 and The Undefended List procedure under Order III Rules 9-14 of the Supreme Court Civil Procedure Rules Cap 211.

The first step in recovering debts in Cameroon is to write a demand letter to the debtor,

1. Issue a reminder: This is the first step a creditor should adhere to. Thus, the creditor is to send a reminder through written letters, mails or SMS reminding the debtor of his inability to pay the debt as at when due and the importance of doing so as refusal may make the creditor to institute the matter in court. Where the debtor does not make payment after the reminder, a further mail to the debtor, referring to the reminder earlier sent should be made. The letter of reminder can be drafted by the creditor lawyer.
2. Negotiate on new terms of payment: It is important for the creditor to give room for discussion and negotiate with the debtor on new terms of payment of the debt where it is glaring that the debtor is desirous of paying the debt but for circumstances beyond his/her control, was unable to do so at the actual date fixed for paying the debt. Thus, payment in installments, a new date for the payment of the debt or selling of valuable goods or property of the debtor to settle the debt could be used as a form of paying up the debt owed.
3. Fall back to the agreement earlier made: Where the parties have made an agreement before the loan, goods or services were given out, it is important for the creditor to fall back on the said agreement to know if an alternative method of resolving the problem before going to court should default be made in paying the debt, was stated therein. Where such is the case, the creditor should first follow such method before going to court.
4. Letter of demand: A letter of demand can be issued to the debtor(s) stating the debt owed, the date which such loan, goods or services were given out, the agreed date it ought to have been paid and the deadline stating that the creditor will commence an action in court where the debt remains unpaid. This letter is an evidence that the creditor has in fact notified the debtor of the debt owed and such payment has not been made. The letter can be drafted by the Creditor’s lawyer. Hence the need for the creditor(s) to employ the services of a lawyer.
5. Apply Alternative Dispute Resolution Mechanism: It is important for the creditor to explore other methods of dispute resolution before resorting to litigation. Hence the need for the creditor to use the Alternative Dispute Resolution mechanism to tackle the issue at hand. Parties often times include the Alternative Dispute Resolution clause in their agreement as a means to solving any problem in case of default but where that is not the case, the creditor can still use this means to solving the issue at hand. 
6. Institute a matter in court: Where the creditor has exhausted all avenues to settle the matter, the creditor can institute a matter in court this being the creditor’s last resort to getting the debt owed. The court has the power to entertain matters regarding debt recovery and as such, enforce payment on the debtor. The court with competent jurisdiction to entertain a debt recovery matter, depends on the total amount of money owed and which is sought to be recovered. Thus, the matter could be instituted in the Court of first instance or High Court. It is important for the creditor to seek the services of a lawyer in order to represent him in court. It is important for matters brought to court concerning debt recovery, be brought timeously as the limitation period within which to bring the debt recovery matter which resulted from a simple contract, is six (6) years excluding the year the contract was entered into and executed.  
7.  In conclusion, debt recovery in Cameroon involves making legal demand first by issuing a demand letter and when the debt remains unpaid, litigation can be explored for the purpose of recovering debts. It is common to see financial institutions or cooperative societies retain the services of legal practitioners to engage a debt recovery procedure.

Article by Barr. Mafany Victor Ngando

Kinsmen Advocates Law Firm

“The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance”