How to Legally Collect Debt from Individuals and Businesses in Kenya

Unpaid debts are a common challenge for businesses, landlords, service providers, and lenders in Kenya. Whether you’re dealing with a client who refuses to pay, a tenant who vacated with arrears, or a borrower who defaulted on a personal loan—the big question is: How do you legally collect the money owed to you in Kenya?

At Meridian Recoveries, we specialize in professional and lawful debt recovery in Kenya, helping individuals and businesses resolve outstanding obligations efficiently and ethically. In this blog, we’ll walk you through the legal steps to recover debt, your rights as a creditor, and the best practices to maximize your chances of successful recovery.

Step 1: Understand the Nature of the Debt

Before pursuing debt recovery, it’s important to clearly define:

• Who owes the debt? (Individual, business, guarantor?)

• How much is owed? (Principal + interest/penalties?)

• What kind of debt is it? (Loan, unpaid invoice, rent arrears, bounced cheque?)

• When did the debt become due?

• Was there an agreement in writing?

A written contract, invoice, payment record, M-Pesa or bank statement, or email exchange can all serve as proof of the debt. Even verbal agreements can be enforceable in some cases—but written evidence is far more effective in court.

Step 2: Send a Demand Letter

The first legal step in debt recovery is issuing a formal demand letter. This letter should:

• Identify the debtor and creditor

• State the amount owed and due date

• Reference the original agreement or transaction

• Demand payment within a specific time frame (e.g. 7 or 14 days)

• Warn of legal action if ignored

This letter serves two purposes:

1. It provides legal evidence that you attempted to resolve the matter amicably.

2. It may prompt voluntary payment—saving both parties time and money.

At Meridian Recoveries, we draft and deliver professional demand letters that comply with Kenya’s legal standards.

Step 3: Negotiate a Repayment Plan (Optional)

Some debtors are not unwilling—they’re just unable to pay in full. In such cases, you may consider:

• Structuring a repayment plan with agreed timelines

• Applying interest or penalties (as per contract)

• Using mediation to resolve disputes

Our team facilitates amicable settlements and mediation, preserving relationships while recovering funds.

Step 4: Hire a Licensed Debt Recovery Agency

If the debtor is ignoring calls or has become evasive, it’s time to bring in the professionals. Meridian Recoveries provides:

✅ Skip tracing to locate missing debtors
✅ Negotiation and field follow-up
✅ Demand delivery and asset verification
✅ CRB listing assistance
✅ Legal preparation and court liaison
✅ Process serving and enforcement support

Outsourcing debt recovery saves you time, stress, and energy, while improving the chances of collecting your money.

Step 5: Consider Legal Action Through the Courts

If negotiation fails, you have the right to take legal action. The appropriate court will depend on the amount of the debt: