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Dispute Resolution Arena: Managing Lender and Debtor Distress

Mediation and Conciliation experts on Monday during a radio program, Dispute Resolution Arena, on Solid 100.9 FM, Enugu, discussed Managing Lender and Debtor Distress.

One of the experts, Mrs. Ella, offered some quotations on debt to drive home its various ramifications. These quotes are: Not everyone chooses to be a debtor, not everyone who decides to be a creditor becomes one – Our situation just swings us to both sides. The debtor is a slave to the lender. The debtor can only be free when his debt has either been cleared or forgiven.” A small debt produces a debtor but a large one can produce an enemy.” The wisdom is to lend an amount one is ready to forgo because there is always the risk of not being paid back.
One more quote is as follows: A lender is much more than a slave owner because the master owns the person but the lender owns not only the debtor but also his dignity. This means that the debtor’s dignity is at stake. At times, being a debtor is a habit that one developed over time growing up.

The mediation experts recommended that debtors should borrow an amount they know they can pay back. They should also make a payment plan. They pointed out that there are cases whereby debtors plan to assassinate their creditors.

A case came up in the course of the radio program involving one Maduabuchi, a furniture maker who is being owed N1.8 million for 5 years now. Maduabuchi said he had a rich mentor he looked up to. The said mentor built a house and he (Maduabuchi) built and put all the furniture in place and waited for payment. However, the mentor got imprisoned in the United States. The man’s wife and kids are based in Nigeria, so he called Maduabuchi to send N50,000 to them. Maduabuchi reminded him of the debt, meanwhile, he gave the man’s wife the money.

However, things took a new dimension when the man came back to Nigeria.

In Maduabuchi’s words:

“This year, I heard that he came back to Nigeria last year. I went to his house but he asked that I won’t be allowed in. I called him, but he doesn’t want to pick my calls. Now, I need the money because my wife recently put to bed. I don’t know what to do.”

For the above case, the mediators observed that communication is key. For instance, telling the lender to have patience that you will pay him back shortly or over time.

This sort of situation above can lead the creditor to resort to drastic measures. Therefore, it was recommended that even if the debtor does not have the money, acknowledging the debt will go a long way to calm the creditor, at least to let him know that you appreciate his patience.

It was observed that some people derive pride in owing others. Some either by choice or omission forget they are owing someone and when they are reminded of their debt, they get angry and ask how much it is that they are even owing in the first place.

On the other hand, lenders should be diplomatic in going about recovering the debt. In fact, the two parties can go into agreement on the repayment plan.

On how to manage debt, the mediators recommended the following:

1. State what you are owing and let it be at the back of your mind.
2. Check if you have the resources to pay back.
3. Have the willingness to pay back your debt.
4. Take a record of your income and reduce your spending.
5. Do not procrastinate the repayment of your debt.
6. Keep your lender in the know: Let him know you have the debt in mind.
7. Don’t be rude to the person you are owing.
8. Set a realistic target on when to offset the debt.
9. If you are unable to repay, you can bring in a third party to help you renegotiate your debt.
10. Bear in mind that whatever you have is not yours until you repay your debt.

There are debtors who do not want to pay back their debt. In such a case, lenders are advised to resort to legal means to recover their money.

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