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Debt Finance & Insolvency

The Debt Recovery Process in Kenya

By 2 Jan 2023No Comments


The Debt Recovery Process in Kenya

Debt recovery processes vary depending on the type of debt and the nature of the creditor and highlighted in this article are the general processes to recover unsecured debts.

When deciding on the debt recovery strategy, the creditor will weigh what is the most compelling method to get the debtor to pay. Debt recovery suits are precipitated by a demand letter to the debtor from the creditor and giving the debtor some time to comply with said demand to pay the owed debt.

Debt recovery for Unsecured Creditors

Unsecured creditors do not have a charge on assets of the debtor.

In such cases, a creditor generally sends a written demand to the debtor giving them a specified amount of time within which to make payment and thus satisfy the debt and when there is failure by the debtor to duly comply with the demand or enter a negotiated settlement that will perhaps extend the time for the debtor to pay the debt or otherwise satisfy the debt to the satisfaction of the creditor, the creditor can escalate to the second stage of recovery of this unsecured debt.

This second stage involves instituting a debt recovery suit in the appropriate court of jurisdiction in order to recover the debt.

Debt recovery suit versus Insolvency of Debtor

When it comes to litigating in court, prudence of a debt recovery suit weighed against an insolvency suit may be considered with the help of a competent lawyer.

Which is the Appropriate court of Jurisdiction?

The competent court is usually where the debtor is located – whether an individual or company. The creditor who is suing needs to consider the monetary jurisdiction of the court because small claims are suited to small claims court, and other larger claims may be filed at the magistrate’s court or the high court.

The creditor will have to consider the contractual issues that led to the claim, hence the need for good litigation advice.

Are there Debt Acknowledgements and Admissions?

The creditor will need to take into account for their litigation strategy, whether there are admissions and acknowledgements of the debt and there are applications that can be presented to the court seeking judgement on the strength of said acknowledgements/admissions.


What is highlighted above applies to unsecured debts in general for instance debt arising from failure to pay for supplied goods and services.

Other unsecured debts for instance those owed to landlords also have their own procedures for recovery of owed amounts for instance a landlord can distrain for rent, which is essentially a remedy under land law that allows a landlord to seize goods of heir tenant to satisfy a debt of owed rent.

Once the court issues a judgement in the creditor’s favour, the creditor is then in a position to obtain payment through execution of a court order, thus for instance the creditor can attach the assets of the debtor and sell them to pay the owed amounts.

The provision of general information herein does not constitute an advocate-client relationship with any reader. All information, content, and material in this article are for general informational purposes only. Readers of this article should get in touch with us/a qualified advocate to obtain legal advice with respect to any particular legal matter.


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