There are two options for pursuing debt collection in Uganda: applying to the court regarding the debtor or using commercial collection agencies or lawyers to collect the debt.
To collect a debt in Uganda, the creditor must first resort to legal measures if the debtor fails to make payments. Execution proceedings can be initiated as a first step in debt collection.
Execution proceedings are carried out by enforcement officers with the court's approval. In Uganda, execution procedures are initiated by the creditor if the debtor does not make the payment or objects to the payment order. The execution process is carried out on the debtor's movable or immovable property.
Firstly, the creditor receives a garnishment order against the debtor. This order aims to seize part or all of the debtor's assets. The seizure process is carried out on the debtor's movable or immovable property.
After the seizure process, the enforcement officer sells the goods, and the proceeds are used to pay off the debt. During this process, the debtor has the right to object and the right to retain a lawyer during the legal proceedings.
In Uganda, the debtor can object to the execution proceedings. The objecting party must submit a written objection to the relevant execution court and provide the necessary evidence to support the objection.
The execution court evaluates the parties' claims and evidence and makes a decision if the debtor objects. If the debtor is found to be in the right, the execution process is halted or cancelled. However, if the debtor is found to be wrong, the execution process continues.
In Uganda, decisions made in execution proceedings can be appealed. The debtor or creditor may object to the execution court's decision and request a re-evaluation from a higher court.
When a debtor objects to a payment order and the objection is found to be unjustified by the court, the debtor may be ordered to pay damages as a defendant. However, the amount of compensation may vary depending on the priority of the claims or debts set by the court.
A foreign person can initiate execution proceedings in Uganda, but they may need to hire a local lawyer. The execution process is carried out according to predetermined procedures, and the debtor's rights are respected.
In Uganda, the statute of limitations is six years if the debt remains unpaid. However, the statute of limitations for public debts may differ.
Additionally, some conditions must be met for the statute of limitations to apply. The creditor may need to provide evidence that they were aware of the debt's existence for the statute of limitations to commence.
In Uganda, it is possible to file for bankruptcy if debts cannot be collected. The bankruptcy process begins with the declaration of bankruptcy of the debtor company and ends with the liquidation of its assets. During the bankruptcy process, creditors are paid in order of priority. However, all unpaid debts during the bankruptcy process are wiped out and the debtor company cannot be restructured after the bankruptcy declaration. Creditors who want to file for bankruptcy must follow certain legal procedures.
Creditors who want to file for bankruptcy can first send a notice to the debtor company giving them a certain amount of time to pay the debt. If the debtor company does not pay the debt within this time, creditors can file for bankruptcy.
To file for bankruptcy, a bankruptcy petition must be prepared, and the reasons why the debtor company is subject to bankruptcy must be clearly stated in this petition. The petition must be submitted to the bankruptcy court.
The bankruptcy court evaluates the application and, if deemed appropriate, may decide to declare the debtor company bankrupt. After the decision, a bankruptcy trustee is appointed, and all assets of the debtor company are put up for sale by the trustee. The proceeds from the sale are first used to cover bankruptcy expenses, and the remaining amount is used to collect the creditors' claims.
If you have a debt to collect in Uganda and want to initiate bankruptcy proceedings against the debtor, or if you want to collect a debt from a bankrupt individual or company, you can contact our office, get more detailed information, and arrange a meeting with our partner law offices in Uganda.