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Collection Demand Letter

Collection Demand Letter Template for Nigeria

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Key Requirements PROMPT example:

Collection Demand Letter

"I need a Collection Demand Letter for an unpaid invoice of NGN 2,500,000 from a manufacturing company in Lagos, with a final payment deadline of March 15, 2025, including a settlement offer of 90% if paid within 14 days."

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Document background
The Collection Demand Letter is a essential business document used in Nigeria when formal attempts to collect an outstanding debt are required. It serves as a crucial step in the debt recovery process, typically issued after informal collection attempts have failed but before initiating legal proceedings. This document must comply with Nigerian debt collection laws and regulations, including the Recovery of Debts Act and Consumer Protection Framework. The letter includes specific details about the debt, payment history, clear payment demands, and potential legal consequences, while respecting both creditor rights and debtor protections under Nigerian law. It's particularly important as it often serves as evidence in subsequent legal proceedings and demonstrates the creditor's attempt to resolve the matter amicably before pursuing court action.
Suggested Sections

1. Sender Details: Full legal name, address, and contact information of the creditor or collecting entity

2. Recipient Details: Full legal name and address of the debtor, including any relevant account or reference numbers

3. Date: Current date of the letter

4. Subject Line: Clear indication that this is a demand for payment, including reference numbers

5. Debt Details: Specific amount owed, origin of the debt, date incurred, and any applicable interest or fees

6. Payment History: Brief summary of previous payment attempts and communications

7. Demand Statement: Clear statement of demand for payment, including the total amount due

8. Payment Terms: Specific deadline for payment and acceptable payment methods

9. Legal Consequences: Statement of potential legal action if payment is not received by the specified deadline

10. Signature Block: Signature of authorized representative, their name, and position

Optional Sections

1. Settlement Offer: Optional section offering a settlement amount or payment plan, used when there's willingness to negotiate

2. Previous Correspondence Reference: Reference to prior collection attempts, used when multiple notices have been sent

3. Dispute Rights: Information about the debtor's right to dispute the debt, particularly important when dealing with consumer debt

4. Interest Calculation: Detailed breakdown of how interest has been calculated, used for complex or long-standing debts

5. Third Party Authorization: Statement of authority if collecting on behalf of another entity, used when acting as a collection agency or legal representative

Suggested Schedules

1. Statement of Account: Detailed breakdown of the debt, including principal, interest, fees, and any payments made

2. Original Agreement: Copy of the original contract or agreement that established the debt

3. Payment History Record: Detailed record of all payments made and missed payments

4. Interest Calculation Schedule: Detailed calculation of interest charges and late fees

5. Supporting Documentation: Any relevant invoices, purchase orders, or other documents proving the debt

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Banking & Financial Services

Retail

Manufacturing

Real Estate

Construction

Healthcare

Telecommunications

Professional Services

Education

Energy

Agriculture

Technology

Transportation & Logistics

Import/Export

General Commerce

Relevant Teams

Legal

Finance

Accounts Receivable

Credit Control

Collections

Risk Management

Compliance

Treasury

Customer Relations

Business Operations

Relevant Roles

Credit Manager

Collections Officer

Accounts Receivable Manager

Financial Controller

Legal Counsel

Debt Recovery Specialist

Credit Control Officer

Finance Director

Account Manager

Business Development Manager

Risk Manager

Compliance Officer

Treasury Manager

Chief Financial Officer

Legal Manager

Industries
Limitation Law of Nigeria: Defines the time limits within which legal action for debt recovery can be initiated. Generally 6 years for simple contracts and 12 years for contracts under seal.
Recovery of Debts (Banks and Other Financial Institutions) Act: Provides the legal framework for debt recovery by financial institutions in Nigeria, including procedures and requirements for debt collection.
Nigerian Constitution (1999): Particularly Section 36, which guarantees fair hearing and due process rights that must be respected in debt collection procedures.
Bills of Exchange Act: Relevant when the debt involves negotiable instruments like checks or promissory notes, defining rights and obligations of parties.
Money Lenders Act: Regulates money lending transactions and associated debt collection practices, particularly relevant for non-institutional lenders.
Consumer Protection Framework (CPF): Central Bank of Nigeria's framework that includes provisions on fair debt collection practices and consumer rights in financial transactions.
Sheriffs and Civil Process Act: Governs the enforcement of judgments and legal process in civil matters, including debt collection procedures.
Evidence Act 2011: Provides rules on admissibility of evidence, crucial for documenting the debt and any supporting evidence in the demand letter.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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