Can a Loan Shark Take You to Court in Nigeria?
There’s a growing concern that loan sharks in Nigeria might increasingly take borrowers to court. This could give them a legal edge to collect debts, even if their lending practices were unfair. Could this be true? Because in Nigeria we have laws that are completely neglected.
These loan sharks often target vulnerable people who need money quickly. In this guide, we’ll discover if loan apps sue you.
Are loan sharks illegal in Nigeria?
Entirely in
Can loan apps sue you?
Loan sharks cannot enforce a loan agreement in court Since their operations are illegal. This means they cannot sue you to get their money back if you take out a loan from a loan shark and default.
Based on the concept of “unclean hands.” This principle is seen as partial. This belief prevents someone who has acted unethically or illegally from seeking legal help to enforce an agreement made through those actions.
Because the loan shark’s business is illegal in simpler terms, the court won’t help them collect a debt they obtained through those illegal means.
What are three key actions you can take to be a responsible borrower?
Some good news for you if you’ve borrowed money from a loan shark,
- No Legal Obligation to Repay: An agreement like this won’t be enforced by the court. Which means loans obtained through an illegal loan shark not to be legally obligated to repay.
- Report Harassment: Report any loan shark to the authorities immediately if a loan shark is harassing you to repay the debt,. This could include the FCCPC or the EFCC as I mentioned above.
- Seeking Legal Help (Optional): consider seeking legal help, especially if the harassment is severe. A lawyer can advise you on your specific situation and help you navigate reporting the loan shark.
- Don’t Borrow More Than You Need: Getting tangled with a loan shark can be a desperate situation that might seem obvious though. Avoid borrowing more than you need and make sure you can comfortably repay it through a legitimate lender in the future if you ever consider getting a loan.
- Pay Extra to Get Out of Debt (the Right Way): Making extra payments can help you get out of it faster if you have legitimate debt. But don’t give in to the loan shark’s pressure. Instead, focus on paying off legitimate debts and rebuilding your credit score so you can access fair loan options in the future.
Can the Police Help with Loan Shark Debt in Nigeria?
No, the police cannot help you with loan shark debt in Nigeria. Here’s why:
- Loan Sharks Operate Illegally: Earlier on I said Loan sharks are not legitimate lenders and their business practices are illegal. The police are focused on criminal activity and debt collection, even for unfair loans, isn’t considered a crime.
- Civil vs. Criminal Matters: Loan disputes fall under civil law, not criminal law. The police handle crimes, while civil courts address disagreements about contracts (like unfair loan agreements).
While the police can’t directly help with debt collection, they might be involved if the loan shark resorts to:
- Threats or Violence: If the loan shark threatens you or your family, or uses violence to collect the debt, then this is a criminal matter and you should report it to the police immediately.
- Fraudulent Loan Practices: If you suspect the loan shark used fraudulent means to obtain your information or trick you into the agreement, report this to the police as well.
Conclusion
Loan sharks are a nasty fact of life, but here’s the good news: they operate outside the law in Nigeria.
- You’re Not on the Hook: Their sky-high interest rates and shady tactics mean they can’t sue you to collect a dime.
- Fight Back! Report Them: If they harass you, report them to the EFCC or FCCPC. These agencies are cracking down on these bullies.
