Debt Collection in Ghana

The debt collection process in Ghana begins with an assessment of the debtor’s solvency, their line of business, the history of the business, the availability of documentary evidence of the debt, ongoing court cases and enforcement proceedings, and the ability to dispute 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 business activities, then it is advisable to use the out-of-court debt collection stage.

This stage involves active negotiations with the debtor to reach an agreement on 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 messaging. This process involves intensive communication with the debtor in order to apply constant pressure. The main objective is to establish contact with key decision makers to achieve early recovery of the debt.

The average time for informal out-of-court collection is up to 60 days (except in cases where a payment 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, then it is necessary to proceed to collection through the courts.

Before initiating judicial collection, it is worth paying attention to the limitation period. The limitation period for debt collection is 6 years. The limitation period is interrupted if the debtor acknowledges the debt in any written document or makes a partial payment of the debt. After the interruption, the limitation period begins to count again.

Ghanaian law provides for judicial collection of debt in the ordinary and simplified judicial procedures.

The courts of first instance are the district courts, the circuit courts and the high courts. District courts have the power to hear cases involving claims up to 20,000 cedis, circuit courts have the power to hear cases involving claims up to 50,000 cedis, and high courts have the power to hear cases involving claims over 50,000 cedis.

Ordinary proceedings are initiated by a summons. The plaintiff must briefly state his claims in the summons and hand it over to the registrar. The plaintiff’s claims must contain sufficient information to enable the defendant to understand the merits of the claim.

Once the summons is served, the defendant has 8 days to file a notice of appearance with the court. 

If the plaintiff’s claim against the defendant concerns only a certain sum of money, and the defendant has not filed a statement of appearance, the plaintiff may, after the expiration of the time fixed for filing the statement, apply for a final judgment against the defendant for an amount not exceeding that specified in the summons, as well as recover legal costs. If the plaintiff’s claim against the defendant concerns an unspecified sum of money, the plaintiff may, under similar conditions, apply for an interlocutory judgment against the defendant.

A defendant who has filed a statement of appearance and intends to defend himself must file a statement of defense within 14 days after the time fixed for appearance. The statement of defense is also served on the plaintiff. A plaintiff who has been served with a statement of defense must file a response within seven days of the date of service.

Each statement of defense by a party must contain only a brief statement of the material facts to which the party relies in support of his claims or defense, but not the evidence with which these facts will be confirmed. The statement shall be as brief as the nature of the case permits. Any factual assertion made by a party in its statement shall be deemed to have been admitted by the opposing party unless it is contradicted in that party’s statement.

If a defendant has been served with a statement of claim in a case and the defendant has filed a motion to intervene, the plaintiff may file a notice with the court asking for summary judgment on the ground that the defendant has no defense to the claim asserted. Such motion by the creditor must be supported by an affidavit setting forth the facts on which the creditor’s claim is based. The notice of motion, a copy of the affidavit in support of the motion and any exhibits relating thereto must be served on the defendant not less than four clear days before the date specified in the notice for hearing the motion. The defendant may file a defense to the motion by affidavit or otherwise if the court so desires. On hearing the motion, the court may either enter judgment in favor of the plaintiff against the defendant or grant the defendant leave to defend against the creditor’s claim.

If a decision is not made at the initial stage of the proceedings, the court conducts further proceedings on the case, during which the parties disclose documents and provide access to them, question witnesses, conduct an examination, provide additional evidence. After the completion of these activities, the court holds debates between the parties and makes a decision.

The decision can be appealed in the appellate procedure. The decision of the district court is subject to appeal to the circuit court. The Court of Appeal hears appeals from decisions of the High and Circuit Courts. The Supreme Court of Ghana hears appeals from decisions of the Court of Appeal. The period for filing an appeal is 21 days in the case of an appeal against an interim decision and three months in the case of an appeal against a final decision.

After the court decision comes into legal force, the creditor should obtain a writ of execution and initiate the enforcement procedure. A writ of execution can be issued if no more than 12 years have passed since the decision was made. The period of validity of a writ of execution is 12 months and can be extended. In the context of enforcement of a judgment, the creditor’s claims may be satisfied by seizure and debiting of funds from the debtor’s accounts; seizure of the debtor’s movable and immovable property and subsequent sale thereof; seizure and confiscation of securities; seizure and confiscation of ships and aircraft.

An alternative option for debt collection is bankruptcy proceedings against the debtor. The creditor has the right to initiate this procedure if the following conditions are met: 1) the amount of the debt is not less than 100,000 cedis and the debtor, within 21 days of receipt of a written demand from the creditor, fails to pay the debt or does not offer alternative settlement options to the reasonable satisfaction of the creditor; or 2) the creditor has obtained a High Court judgment, the enforcement of which has not yielded positive results; or 3) it is proven to the registrar that the debtor company is unable to pay its debts. In bankruptcy proceedings, if the debtor’s assets are insufficient to fully satisfy the claims of creditors, it is possible to cancel the debtor’s transactions made with the intent to cause damage to creditors. Such transactions include, in particular: 1) a floating charge on the debtor’s property that was created within 12 months before the start of liquidation; 2) payment of money or transfer of property within 21 days that preceded the filing of an application for liquidation; 3) disposal of property at a reduced value or disposal of property not for the purpose of paying off a debt payable within 2 years before the issuance of the liquidation order. In addition, officials of the debtor who knowingly participated in any fraudulent act in the debtor’s activities are personally liable for the debts or any other obligations of the company that the court may order. As a result of applying the above provisions, it is possible to return back to the debtor what he lost from such actions and thereby increase the liquidation estate to satisfy the claims of creditors.

If you have any questions or need support for international debt collection in Ghana, 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 GHANA

11.12.2024

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