Debt Collection in Cameroon

The debt collection process in Cameroon begins with an assessment of the debtor’s solvency, their business sector, the history of the business, the availability of documentary evidence of the debt, ongoing court cases and enforcement proceedings, and the possibility of disputing the debt. This assessment determines the strategy that will be used on behalf of the client in the collection process.

If the debtor has no ongoing court cases or outstanding judgments for debt collection and is actively engaged in commercial activities, then it is advisable to use the out-of-court debt collection stage.

This stage involves active negotiations with the debtor in order to reach an agreement on the payment of the creditor’s claims or other possible settlement options (e.g. return of goods, transfer of the debt to a third party, exchange of services or goods).

Interaction with the debtor begins immediately after sending a notice by mail, email, phone or instant messengers. This process involves intensive communication with the debtor in order to exert constant pressure. The main objective is to establish contact with key decision makers to achieve the fastest possible recovery of the debt.

The average time for informal out-of-court collection is up to 60 days (except in cases where a debt repayment plan has been agreed upon). If this stage does not bring the expected results or after an initial analysis it becomes clear that it is not applicable, it is necessary to proceed to collection through the courts.

The Republic of Cameroon is a member of OHADA (Organization for the Harmonization of Business Law in Africa), which includes nine approved Uniform Legal Acts applicable to all member countries of the above-mentioned organization. Therefore, the procedures for judicial debt collection, enforcement and bankruptcy are mainly regulated by the provisions of the relevant Uniform Acts.

Before initiating judicial collection, it is worth paying attention to the limitation period. The general limitation period under the national legislation of Cameroon is 30 years. According to the provisions of the general commercial law OHADA, obligations arising from commercial transactions between merchants or between merchants and non-merchants expire after five years. The effects of the expiration of the limitation period apply in the court of first instance and on appeal only at the request of the debtor. The limitation period is interrupted by the recognition of the creditor’s claims by the debtor. After the interruption, the limitation period begins to run anew. The limitation period may be shortened or extended by agreement of the parties. However, it cannot be shortened to less than one year or extended to more than ten years. The parties may also, by mutual agreement, supplement the list of reasons for the suspension and interruption of the limitation period.

Judicial debt collection in the Republic of Cameroon is carried out in the ordinary judicial procedure and by order of payment.

The ordinary judicial procedure is initiated by serving a summons. The summons must be served at least eight days before the hearing if the party is within the territorial jurisdiction of the court. The specified period is extended by: thirty days for persons located in other regions of Cameroon; two months for persons located in Europe and Africa; three months for persons located in America; four months for persons located in all other countries.

On the appointed day, the parties must appear in person or through their representatives. If the debtor does not appear on the day specified in the summons, the case will be heard in his absence, unless the creditor agrees to an adjournment. If the summons has not been served on the debtor, the judge will order the service of a second summons.

If the creditor is not a resident of Cameroon, the defendant may require the creditor to provide security to cover the costs and damages to which the creditor may be held. The amount of the security is determined by the court decision. Until the security is provided, the debtor has the right not to defend himself against the creditor’s claims.

Three days before the hearing, the parties are required to submit their arguments and conclusions to the court registry and the opposing party. On the day of the hearing, the court hears the parties and if all the circumstances of the case are clear, the court may make a decision at the same hearing. If after hearing the parties the case is not ready for a decision, the court orders a preparatory investigation.

During the preparatory investigation, the court verifies the facts and documents, interrogates the parties and witnesses, appoints experts and decides other procedural issues. After completing the investigation, the court holds a debate between the parties and makes a final decision.

The procedure for issuing a payment order is regulated by the Debt Settlement Act (OHADA) and is used to collect debts arising from a contract, a negotiable bill or a cheque. To initiate the procedure, the creditor must file an application for a payment order with the court, attaching documents proving the existence of the debt. If the court, having examined the documents provided, finds the claims justified in whole or in part, it issues an order for payment of the specified amount. In the event of a full or partial refusal to satisfy the application, the court’s decision is not subject to appeal, and the creditor can only protect his interests by filing a claim within the general judicial procedure. 

Certified copies of the application and the payment order must be served on the debtor within three months. If this condition is not met, the payment order loses its legal force. After receiving the documents, the debtor is obliged to either pay the debt within 15 days or file an objection within the same period. In the absence of an objection, the payment order becomes an enforcement document. If the debtor files an objection, the judge conducts conciliation procedures. If an agreement is reached, a reconciliation act is drawn up, signed by both parties, one copy of which has executive force. If reconciliation is not reached, the court considers the case on the merits and issues a decision, even if the debtor who filed the objection is absent. Such a court decision has the legal force of an act issued following adversarial proceedings and replaces the original order for payment.

The decision of the court of first instance may be appealed to the court of appeal. The period for filing an appeal is three months, which is increased by the remote periods specified above. The decision of the court of appeal may be appealed to the Supreme Court of Cameroon within three months from the date of the contested decision. The decision of the Supreme Court is final and cannot be further appealed.

After the court decision comes into legal force, the creditor must initiate enforcement proceedings. The court decision may be presented for enforcement within 30 years. In the context of the enforcement of a court decision, the creditor’s claims may be satisfied by seizing and writing off funds from the debtor’s accounts; seizing the movable and immovable property of the debtor with their subsequent sale; seizing and confiscating securities, seizing and confiscating the debtor’s property held by third parties.

An alternative method of debt collection is the initiation of bankruptcy proceedings against the debtor. In the Republic of Cameroon, this procedure is regulated by the Uniform Insolvency Law (OHADA). A creditor may initiate bankruptcy if its claims are undisputed, liquid and payable. If the debtor’s assets are insufficient to satisfy the claims of all creditors, the law provides for the possibility of annulling transactions made by the debtor with the aim of causing damage to creditors. Such transactions, made between the suspension of payments and the initiation of bankruptcy proceedings, include: gratuitous transfer of property; agreements where the debtor’s obligations significantly exceed the obligations of the other party; early repayment of debts that are not yet due; provision of security for previously existing obligations; any transactions in which the counterparty knew about the debtor’s financial insolvency. Cancellation of such transactions allows the return of property or assets lost by the debtor, which helps to increase the liquidation estate to satisfy creditors’ claims and cover the costs associated with the bankruptcy procedure.

If you have any questions or need support on international debt collection in Cameroon, our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us to get additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY CAMEROON

17.12.2024

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