Debt Collection in Sierra Leone

The debt collection process in Sierra Leone 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 business 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 apply constant pressure. The main objective is to establish contact with key decision makers to achieve the fastest possible debt recovery.

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 6 years. The consequences of the expiration of the limitation period are applied in court only at the request of the debtor. The limitation period is interrupted if the debtor explicitly or implicitly acknowledges the debt. After the interruption, the limitation period begins to count again.

Sierra Leone’s legislation provides for judicial debt collection in the ordinary and simplified judicial procedure.

The ordinary process of the court, depending on the cause of action, is commenced by the issue of a summons or by the filing of an initial application. The service of a summons or initial application is effected by a bailiff. On receipt of the said document, the defendant must register at the office of the Master or the County Registry. The defendant must, on the day on which he registers his appearance, notify the plaintiff’s solicitor or, if the plaintiff is acting in person, the plaintiff of his appearance.

The time for appearing for registration is 14 days if the debtor is in Sierra Leone. If the debtor is outside the country, the time for appearing is fixed in the order and depends on the distance. The defendant must, at the time of registration, state his address and place for service (or the address of his solicitor), which must not be more than 5 miles from the office of the Master or 7 miles from the County Registry.

If the plaintiff’s claim relates only to a liquidated debt and the defendant has not appeared, the plaintiff may, after the expiration of the time allowed for the defendant’s appearance, request a final judgment in an amount not exceeding the amount stated in the notice, plus interest at the stated rate, if any, or, if no rate is stated, at the rate of 5 percent until the date of the judgment. If the claim relates to an unliquidated debt, the plaintiff may request an interim judgment.

If the defendant has been notified of the filing of the claim and has appeared, the plaintiff may, after notice to the defendant, apply to the court for a summary judgment against the defendant on the ground that the defendant has no defense to the claim. Such application by the plaintiff must be supported by an affidavit and copies of such documents must be served on the defendant not less than 4 clear days before the date of the hearing. The defendant may rebut the application by an affidavit. If at the hearing of the application the court does not dismiss the application or the defendant does not convince the court that there is a disputed issue that should be heard or that for some other reason a trial should be held on the claim, the court may enter judgment on the plaintiff’s claim against the defendant.

If the defendant has registered an appearance, he may file a defense to the claim within 10 days after the expiration of the time for registering an appearance. After receiving the defendant’s defense, the court conducts a hearing on the case during which a list of issues of fact and law are established between the parties in dispute. To resolve the disputed issues, the parties conduct discovery and present evidence, which the court evaluates in order to establish the truth in the dispute. After examining the evidence, the court holds a debate between the parties and makes a final decision.

The Magistrate’s Court decision may be appealed to the High Court. The High Court decision may be appealed to the Court of Appeal. The Court of Appeal decision may be appealed to the Supreme Court of Sierra Leone. The Supreme Court decision is final and may not be appealed further.

Once the judgment has entered into legal force, the creditor must obtain a writ of execution and initiate enforcement proceedings. A writ of execution may be issued if no more than 6 years have passed since the judgment was rendered. As part of the enforcement of the 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 and then selling them; seizing and confiscating securities; seizing and confiscating the company’s shares.

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 5,000,000 leones, payable either immediately or at a specified future date; 2) the debtor has committed an act of bankruptcy within three months preceding the commencement of the bankruptcy procedure; 3) the debtor has habitually resided or had his place of business in Sierra Leone during the year preceding the date of filing of the bankruptcy petition. According to the provisions of the Bankruptcy Act, the following acts are considered as acts of bankruptcy: 1) the debtor makes a fraudulent transfer, gift or conveyance of his property or any part thereof; 2) the debtor leaves Sierra Leone, or, if outside Sierra Leone, remains there or otherwise absconds; 3) if a foreclosure has been ordered against the debtor by way of seizure of his property in a judicial proceeding and the property has either been sold or is retained by a bailiff for twenty-one days; 4) if a creditor has obtained a final judgment or order against the debtor for any amount and the debtor has failed to comply with the demand for execution of the judgment within fourteen days; 5) the debtor notifies any of his creditors that he has suspended or intends to suspend payments on his debts or files a bankruptcy petition against himself.

In bankruptcy proceedings, if the debtor’s assets are insufficient to fully satisfy the claims of creditors, a provision is made for the possibility of setting aside transactions of the debtor made with the intent to cause damage to creditors. Such transactions shall include, in particular: 1) any disposition of property without valuable consideration made within six years before the opening of bankruptcy proceedings. (Unless the debtor proves that at the time of the order, he could pay all his debts without the help of such property); 2) if the debtor transfers to another person his existing or future debts, as a result of which the debtor becomes bankrupt; 3) any transaction in which the debtor’s counterparty knew that the debtor was in a state of bankruptcy; 4) 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 on international debt collection in Sierra Leone, our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us for additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY SIERRA LEONE

05.12.2024

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