Debt collection in Namibia

The debt collection process in Namibia 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 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 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 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, 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 3 years. For debts based on bills of exchange, the limitation period is 6 years. The limitation period is interrupted if the debtor explicitly or tacitly acknowledges the debt. After the interruption, the limitation period begins to count anew.

Judicial debt collection in Namibia is carried out in the usual and simplified judicial procedure.

Ordinary court proceedings are initiated by filing a lawsuit with the court, after which the court, if the lawsuit meets the procedural requirements, registers it and issues a summons to summon the defendant to appear in court. 

After receiving the summons, the debtor has 10 days to file with the court a notice of intent to defend against the claim. The period from December 16 to January 15 is not counted in calculating the time limit. If the defendant fails to file a notice of intent to defend, the plaintiff may ask the court to schedule a hearing for default judgment. If the defendant files a notice of intent to defend, the registrar assigns the case to the managing judge.

Once the case is assigned to the managing judge, the managing judge must notify the parties of a time and date for a case planning conference, which must be held no later than 15 days from the date of assignment. Whether or not the parties file a case plan before the conference, the managing judge must determine what is to be included in the plan at the conference and make it an order of the court. 

If the defendant has filed a notice of intention to defend, the plaintiff may apply to the court for summary judgment on each demand set out in the statement of claim, including a demand for interest and costs, provided that the claim: is based on a liquid instrument and is for a specified sum of money. The plaintiff’s statement must be sworn. The managing judge must give directions for the hearing of the summary judgment application, and a hearing date may be fixed at the case planning conference. At the hearing of the summary judgment application, the defendant may: provide security to the plaintiff; or convince the court by affidavit or oral testimony that the defendant has a reasonable defence to the claim. If the defendant fails to provide security or convince the court, the court may grant summary judgment in favour of the plaintiff. Otherwise, the court will proceed with the case in accordance with the approved plan.

After the case management conference is completed, the judge will schedule a preliminary hearing. At this time, the plaintiff must initiate communication with the defendant to prepare a draft preliminary hearing order. The draft order must be prepared 4 days before the preliminary hearing and must cover all questions of fact and law to be determined at the trial; all relevant facts that are not in dispute; the names of all witnesses to be called to testify; a list of all evidence that the parties intend to give; proposals to expedite the trial and other procedural matters.

The court then conducts the trial and, after all evidence and submissions have been considered, the court will deliberate between the parties and make a decision.

A decision of the local court may be appealed to the High Court within 15 days of the decision. A decision of the High Court may be appealed to the Supreme Court of Namibia within 21 days of the decision. There is no further appeal from the Supreme Court.

Once the judgment has entered into legal force, the creditor must initiate enforcement proceedings. A judgment may be submitted for enforcement for 30 years. Within the framework of enforcement of a judgment, 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 the debtor and keeping him in custody.

An alternative option for debt collection is the bankruptcy procedure of 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 N$100, payable either immediately or at a certain time in the future; 2) the debtor committed an act of bankruptcy within three months preceding the opening of the bankruptcy procedure.

According to the provisions of the Bankruptcy Act, the following acts are considered to be acts of bankruptcy: 1) the debtor transfers his property or any part thereof with the intention of causing damage to creditors or giving advantage to one creditor over others; 2) enters into or proposes to enter into any agreement with any of his creditors for the full or partial release of the debtor from his debts; 3) the debtor leaves the territory of Namibia or hides from creditors; 4) if the debtor has no property or the debtor has failed to indicate the existing property in the process of execution of the judgment; 5) if the debtor notifies in writing any of his creditors that he is unable to pay any of his debts.

As part 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 intention of causing damage to creditors. Such transactions include, in particular: 1) any disposal of property without valuable consideration; 2) any transaction in which the debtor’s counterparty knew that the debtor was in bankruptcy; 3) giving preference to one creditor over others. As a result of the cancellation of the above actions and transactions, it is possible to return back to the debtor what he lost from such transactions and thereby increase the liquidation estate to satisfy the claims of creditors and cover the costs of implementing the bankruptcy procedure.

If you have any questions or need support for international debt collection in Namibia, 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 NAMIBIA

10.01.2025

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