Debt Collection in Liberia

The debt collection process in Liberia 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, current litigation 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 current litigation or outstanding judgments for debt collection and is actively engaged in business, 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 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 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 is 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.

Before initiating judicial collection, it is worth paying attention to the statute of limitations. The statute of limitations for debt collection based on written documents is 7 years, for other cases it is 3 years. The consequences of the expiration of the statute of limitations are applied in court only at the request of the debtor. The running of the statute of limitations is interrupted in the case of a written acknowledgement of the debt or partial payment. After the interruption, the statute of limitations begins to count anew.

Liberian law provides for judicial collection of debt in the usual judicial procedure.

For the collection of debts in Liberia, there is a Debt Court, which has exclusive jurisdiction over debts in which the amount in dispute exceeds US$2,000 and appellate jurisdiction over all other debts in which the amount in dispute is US$2,000 or less. The Debt Court exercises appellate jurisdiction over appeals from the Magistrates’ Court or the Peace Court.

The ordinary judicial process is commenced by filing a complaint or petition with the clerk of the court. Upon receipt of the said document, the clerk of the court shall immediately issue a summons. The summons shall be forwarded to the bailiff for subsequent service on the debtor. The summons shall be served with the plaintiff’s complaint or petition.

The debtor shall appear in court within ten days of receipt of the summons or re-summons (if the original summons was not served). The filing of an answer, notice of appearance, or the filing of a motion by the defendant shall be deemed an appearance.

If the defendant appears within the time specified above and fails to file an answer, it shall be deemed to be a general denial of all allegations in the complaint. At trial, such a defendant may cross-examine plaintiff’s witnesses and present evidence to support his denials, but may not present evidence to support any affirmative allegations.

If the defendant files an answer, he shall deny in his answer those allegations of the creditor which he knows or believes to be false. Allegations to which an answer is required shall be deemed admitted unless disputed in the answer. Allegations to which an answer is not required shall be deemed to be denied.

After the exchange of process, the clerk of the court shall give the attorneys a notice of the time and place of the pretrial hearing. The hearing shall not be scheduled earlier than 10 days after service of the notice. Before the date set for the pre-trial conference, the attorneys are required to meet to agree on as many issues as possible. Each attorney must prepare and present at the hearing a memorandum setting forth the agreed issues and his or her client’s factual and legal positions on the issues in dispute.

If an attorney fails to prepare, appear, or participate in the hearing, the court may treat that as contempt of court and compel that attorney to appear. If a party fails to appear as ordered by the court, a fine may be imposed and the case may be heard in his or her absence.

Following the hearing, the court shall issue a pre-trial order which shall set forth: a list of issues for trial that have not been resolved by admission or agreement of the parties; permission to apply discovery procedures; motions considered; agreements of the parties on the manner and extent of the presentation of evidence at trial.

After the presentation of evidence has been completed and the court has considered it, the court shall hold final arguments and render a decision. In cases tried on the basis of facts without the participation of a jury, the court shall give the parties an opportunity to file requests for statements of fact before rendering a decision. The court’s decision shall be rendered within fifteen days after the final filing of such requests.

A decision of the court in cases of debt may be appealed to the Supreme Court of Liberia. The appeal shall be made at the time of the decision by oral announcement in open court. This announcement may be made by the party himself, if he is representing himself, or by his counsel. If counsel is not available, the announcement may be made by a substitute appointed by the court. Each appellant must provide an appeal bond in the amount fixed by the court, with two or more legally qualified sureties who guarantee that the appellant will indemnify the other party against all costs or damages incurred in connection with the appeal if it is unsuccessful, and that he will comply with the decision of the Supreme Court. Failure to provide an appeal bond within the time fixed by the court may be grounds for dismissal of the appeal. During the appeal period, the contested decision is suspended, unless the amount of the claim is supported by documentary and direct evidence. The decision of the Supreme Court is final and cannot be further appealed.

After the judgment has entered into legal force, the creditor must initiate enforcement proceedings. The limitation period for enforcement of a judgment is 10 years from the date on which the creditor acquired the right to execution. This period is interrupted in the event of partial payment or written acknowledgment of the debt. Within the framework of the enforcement of a judgment, the creditor’s claims can be satisfied by seizing and writing off funds from the debtor’s accounts; seizure of the debtor’s movable and immovable property with their subsequent sale; seizure and confiscation of securities; seizure and confiscation of company shares.

In the event of insolvency of the debtor, bankruptcy proceedings should be considered. A debtor is considered insolvent if it is unable to pay its debt or fulfill its contractual or established financial obligations as they fall due. Within the framework of the bankruptcy procedure, 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 should include, in particular: 1) a transaction with a creditor in order to give him priority over other creditors (if it is made three months before the start of the bankruptcy procedure, or six months if made with an associated person); 2) a transaction at a reduced price (if it is made one year before the start of the bankruptcy procedure, or two years if made with an associated person); 3) a transaction made with the purpose of detaining creditors, such as a gift of property, a lease of property on non-commercial terms, or a sale of property without sufficient compensation (if made within a year before the bankruptcy proceedings). In addition, if the debtor is a company, the directors of such a company are liable to creditors for actions that led to the company’s insolvency. As a result of the cancellation of the above transactions and holding the directors of the company liable, it is possible to increase the liquidation estate. And this, in turn, increases the chances of recovering debts in full.

If you have any questions or need support for international debt collection in Liberia, 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 LIBERIA

06.12.2024

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