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What You Need to Know About Debt Recovery in Kenya (Your Legal Rights and Options)

Unpaid debts can cripple a business or individual. Whether it’s a client who failed to pay for goods, a tenant who defaulted on rent, or a business partner who broke financial agreements—knowing your rights and recovery options in Kenya is essential.

At Meridian Recoveries, we specialize in professional debt recovery services in Kenya, helping businesses, landlords, lenders, and individuals recover what’s legally owed to them. In this blog, we’ll break down the debt recovery process, your legal rights as a creditor, and the smartest ways to approach defaulted payments.

What Is Debt Recovery?

Debt recovery is the process of pursuing outstanding payments owed by individuals or companies. It can involve:

  • Sending formal reminders

  • Negotiating repayment terms

  • Engaging a professional debt collector

  • Taking legal action through courts

In Kenya, debt recovery is governed by laws such as:

  • The Contract Act (Cap. 23)

  • The Civil Procedure Act

  • The Limitation of Actions Act

  • The Insolvency Act (2015)

Creditors have the legal right to pursue their money, but the process must be conducted ethically and within legal boundaries.

Common Types of Debts We Recover

At Meridian Recoveries, we assist with:

  • Business-to-business debts (supplies, credit sales, services)

  • Personal loans (with or without security)

  • Unpaid rent or lease arrears

  • Defaulted salary advances

  • Vehicle logbook loan arrears

  • Cheque or post-dated payment defaults

  • Court-awarded debts

  • Title deed loan defaults

Your Legal Rights as a Creditor in Kenya

If someone owes you money and has not paid as agreed, you have the right to:

✅ Issue a Demand Letter

This is the first formal step. A well-drafted demand letter outlines the debt owed, the due date, and a timeframe for payment (typically 7–14 days). This letter is admissible in court and may lead to voluntary payment.

✅ Engage a Licensed Debt Recovery Agency

Professional agencies like Meridian Recoveries are allowed to pursue debts on your behalf. We use ethical methods such as reminders, skip tracing, negotiation, and structured repayment plans.

✅ File a Civil Lawsuit

If informal efforts fail, you can file a civil suit under the Civil Procedure Rules. If you have documentation (e.g. invoices, agreements, emails), the court may issue a judgment in your favor.

✅ Register a Charge or Lien (If Secured Loan)

If the debt was backed by collateral—like land, a car logbook, or shares—you can enforce the charge and auction the asset upon default.

✅ Report to Credit Reference Bureaus (CRBs)

You can list the debtor with CRBs (Metropol, TransUnion, Creditinfo), which affects their credit rating and limits access to future loans.

✅ File for Bankruptcy/Insolvency Proceedings

If the debt is over KES 250,000 (individual) or KES 500,000 (company), you may file for liquidation under the Insolvency Act if the debtor is unable or unwilling to pay.

Step-by-Step Debt Recovery Process in Kenya

Here’s how a typical recovery journey looks with Meridian Recoveries:

1. Case Assessment

We review your documents: invoices, agreements, M-Pesa records, bank statements, cheques, or any written communication. We also verify the debtor’s identity.

2. Initial Demand

We issue a legally structured demand letter or make a formal call to the debtor. This may result in immediate payment or dialogue.

3. Negotiation & Repayment Structuring

Some debtors are willing to pay but need more time. We facilitate negotiation of structured payment plans, often including interest and penalties.

4. Field Tracing & Follow-Up

If the debtor is untraceable or ignoring contact, we use skip tracing and field agents to locate them and make physical visits if necessary.

5. Legal Action (if required)

Where recovery efforts fail, we prepare legal documentation for court action, working with our partner law firms to file a suit.

6. Enforcement of Judgment

Once a court judgment is obtained, we proceed with enforcement—garnishment, asset attachment, or auction—to recover the owed amount.

Why Hire a Debt Recovery Agency Instead of Doing It Yourself?

Trying to recover debts on your own can be frustrating, time-consuming, and even counterproductive. Here’s why hiring experts like Meridian Recoveries makes sense:

✅ We Save You Time and Stress

You focus on your core business while we handle all the follow-ups, documentation, and negotiations.

✅ We Know the Law

Our agents are trained in debt recovery laws and ethical practices. We avoid actions that can backfire or result in lawsuits.

✅ Higher Recovery Success Rates

Our structured process and field expertise often result in faster, higher recovery rates than DIY efforts.

✅ We’re Objective

We remain professional, even when emotions are high—preserving your reputation and maintaining business relationships where needed.

✅ We Work on Commission

In many cases, we charge based on what we recover. This aligns our interest with yours and lowers your financial risk.

How to Legally Protect Yourself Before Giving Credit

The best way to avoid difficult debt recovery is prevention. Before extending credit or loans:

  • Draft a written agreement with clear terms

  • Include payment deadlines, penalties, and interest clauses

  • Request guarantors or collateral for large loans

  • Conduct background checks on borrowers

  • Use promissory notes, post-dated cheques, or standing orders

  • Verify ID and KRA PIN for tracking

Meridian Recoveries also offers commercial investigations to assess credit risk before you extend credit.

Mistakes to Avoid During Debt Recovery

✅ Don’t harass or threaten the debtor – This is illegal and can backfire.
✅ Don’t overstep privacy laws – Avoid sharing the debt publicly unless it’s through proper CRB listing or court.
✅ Don’t give up too soon – Many debts are recoverable with the right approach and persistence.
✅ Don’t act without documentation – Always maintain written proof of the loan or transaction.

What If the Debtor Has No Money?

Even if a debtor claims to be broke, they may own:

  • Land or property

  • Motor vehicles

  • Equipment or shares

  • Receive regular salary or income

We use asset tracing and court enforcement tools to attach and recover funds even when the debtor tries to hide assets.

How Long Do You Have to Recover a Debt?

Under Kenya’s Limitation of Actions Act, you have up to 6 years from the date the debt became due to file a recovery suit. After that, the debt becomes legally time-barred unless special circumstances apply.

Why Choose Meridian Recoveries?

At Meridian Recoveries, we combine legal expertise, field experience, and a results-driven approach to give our clients the best chance of recovering their money.

✅ Licensed and professional debt collectors
✅ Nationwide reach across Kenya
✅ Affordable, success-based fee models
✅ Fast turnaround and clear communication
✅ Legal and court-ready documentation

We work with SMEs, landlords, microfinance institutions, cooperatives, and individuals—no debt is too big or small.

Final Thoughts

Unpaid debts are more than a financial inconvenience—they’re a threat to your business or personal livelihood. Fortunately, Kenya’s laws support you as a creditor, and professional help is available.

Don’t wait until it’s too late. The longer you wait, the harder it becomes to collect.

Let Meridian Recoveries help you recover your money quickly, legally, and professionally.

Need Help Recovering a Debt in Kenya?

📞 Call Meridian Recoveries for a free consultation today.
📧 Email: [Insert Email]
🌐 Website: [Insert Website]
📍 Based in Nairobi, Serving All of Kenya

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