Debt Recovery Company or Lawyer? What a Nigerian Business Should Use

A Nigerian business chasing an unpaid debt has three realistic options: a debt collection company, a law firm, or doing it yourself through the Small Claims Court. They differ in what they are allowed to do, what they cost, and how seriously debtors take them.

How do the three options compare?

• A debt collection company makes calls, sends reminders and may visit the debtor. Useful for gentle, high-volume chasing. It cannot act as your lawyer or represent you in court.
• A law firm writes to the debtor as your solicitor on its letterhead, signed by a licensed legal practitioner, and can prepare and file court processes. Debtors tend to take a lawyer's letter more seriously, because it signals that court is next.
• Doing it yourself: you write the letter of demand and file at the Small Claims Court on your own. The cheapest in fees, but it takes your time and you must get the forms and steps right.

What should decide your choice?

• The amount. For claims up to ₦5,000,000 (excluding interest and costs), the Small Claims Courts in Lagos and Delta are designed to be quick, so a lawyer's letter followed by a Small Claims filing is often enough (Lagos State Small Claims Court Practice Directions).
• Whether the debt is disputed. If the customer genuinely disputes what they owe, or there is a counterclaim, you need a lawyer's advice rather than reminders.
• How many accounts. A few debts can be handled one by one; a whole ledger needs a process with per-account pricing and reporting.
• Your relationship with the customer. A firm but professional letter preserves more goodwill than repeated calls.

What is not allowed, whoever you use?

• Harassing, threatening or publicly shaming a debtor.
• Using the police or EFCC to recover an ordinary civil debt.
• Contacting the debtor's family, friends or employer to pressure them.

Using any of these can expose your business to complaints and liability, and it weakens your claim.

One option: Pandas LP combines the two. A licensed practitioner reviews and signs every letter of demand, the follow-ups run on days 7, 10 and 14, and the Small Claims forms are prepared if the debtor still does not pay, at fixed fees from ₦10,000. Debt recovery for businesses.

Comparing prices? See what debt recovery companies charge in Nigeria. If you go it alone, our guide to recovering a debt at the Lagos Small Claims Court walks through the steps.