Debt Collection Claims in Trinidad and Tobago: Can a Lawyer help?

Essential Guidelines for Pursuing Debt Recovery: A lawyer's perspective.

Summary

Debt collection claims can be the most frustrating of all civil litigation. Enforcing the repayment of money loaned or the unpaid selling price for goods is considered an unnecessary and unpleasant task and often involves the termination of business or personal relationships. The process from filing a claim to receiving actual payment or money "in your hands” can be complex and daunting. Given the prevailing economic conditions in Trinidad and Tobago, these claims are increasingly common. For individuals and businesses in Trinidad and Tobago, understanding the legal framework and procedural nuances of debt recovery is crucial. This article aims to provide a comprehensive overview of what litigants should expect about pursuing debt collection claims in Trinidad and Tobago and clear some common myths about recovering your money.

Legal Framework for Debt Collection

Debt collection claims involves the repayment of loans, the unpaid purchase price for goods sold on credit or other such claims for a specific sum of money due and owing. Claims for sums less than $50,000.00 can be dealt with in the Petty Civil Courts, otherwise claims must be filed in the High Court of Trinidad and Tobago.

Statute of Limitations

The Limitation of Certain Actions Act sets out the time limits for initiating debt recovery proceedings. Generally, a debt collection claim must be filed within four years from the date on which the debt became due. Failing to file within this period may result in the claim being time-barred, rendering it unenforceable. It is therefore important to act promptly.

Types of Debt Collection Claims

Litigants can pursue various types of debt collection claims, including:

·      Unpaid invoices for goods sold or services rendered

·      Outstanding loan balances

·      Personal loans and advances

Each type of debt may require different evidence and documentation to support the claim. However, an oral agreement is equally enforceable. It is a common misconception that there must always be documents to support such a claim. While this is best practice, an oral agreement is equally enforceable as a written one, the only difference being a matter of proof. Therefore, if you lent someone money but did not have a signed agreement about the terms, you not barred from suing to recover the loan.

Steps in the Debt Collection Process

Pre-Litigation Steps

Before initiating legal proceedings, it is advisable to attempt to settle the debt amicably. This is actually a requirement issued by the Supreme Court in its Pre Action Protocol Direction. This can involve sending a formal demand letter to the debtor, outlining the amount owed and requesting payment within a specified timeframe. Mediation or negotiation may also be explored as alternative dispute resolution methods.

Filing a Claim

Filing a Claim

Once pre-litigation steps have been exhausted without a resolution, the next step is to file a formal claim in court. This involves preparing and submitting the necessary legal documents, including a statement of claim that outlines the details of the debt and the relief sought. It is important to ensure that all required documentation, such as contracts, invoices, and correspondence, is included to support the claim.

Court Proceedings

After the claim is filed it must be served on the defendant. If the defendant cannot be located, the court can order service by other means, upon application. This often includes publication of a notice of the claim in a newspaper but can also include other matters such as service by registered mail to a known address for the defendant. Upon service the defendant is required to file an appearance and thereafter a defence disputing the claim or he can admit the claim and make an application to pay by instalments. If he does nothing, the claimant may apply for judgment, discussed below. If he files a defence, the court will schedule a hearing where both parties can present their case. The debtor will have an opportunity to respond to the claim, and the court may require additional evidence or witness testimony. It is crucial for the litigant to be well-prepared and to have a clear understanding of the legal arguments and evidence that will be presented.

Judgment and Enforcement

If the court rules in favor of the claimant, a judgment will be issued against the debtor. If the defendant does not file a defence the claimant may obtain what is commonly referred to as default judgment. This is obtained by the claimant’s attorney filing the requisite documents with the court registry and does not require a court appearance or hearing. This is the process commonly expected in simple debt collection claims where there is not likely to be any defence.

Once an order for repayment or judgment has been obtained, this does not automatically lead to repayment. Commonly a request will be issued to the defendant requiring payment in accordance with the judgment. If the defendant fails to comply the claimant must proceed to what is termed enforcement procedures to obtain the money. A judgment can be enforced through various means, such as garnishing the debtor's bank accounts, seizing assets, or placing a lien on or selling property (real estate). It depends on the assets that the defendant has and there are also processes to enforce disclosure of such assets. It is important to follow the proper legal procedures for enforcement to ensure that the judgment is executed effectively. It is also important to appreciate that the mere issuance of a judgment or order in favour of the creditor does not automatically lead to repayment. There are circumstances where an order for committal to prison can be made for disobedience of a court order.

Alternative Dispute Resolution

In some cases, it may be beneficial to explore alternative dispute resolution methods, such as arbitration or mediation, to resolve the debt collection claim. These methods can be less time-consuming and costly than traditional court proceedings and may result in a more amicable resolution.

Conclusion

Navigating the debt collection process in Trinidad and Tobago requires a thorough understanding of the legal framework and procedural steps involved. By following the guidelines outlined in this article, litigants can increase their chances of successfully recovering debts and achieving a favorable outcome.