5 Tips Why Bankruptcy law can’t be enforced in Nigeria.
When it comes to the point of enforcing bankruptcy law in Nigeria, the masses tend to be ignorant about it, and also due to the ambiguous nature of bankruptcy, it happens not to be achievable.
Most of the Nigerian Lawyers are all facing the same way with the same notion towards the Bankruptcy (Amendment) Decree No 109 of 1992. This act has already been amended in the year 1992.
It has been brought down for Nigerian lawyers to narrow down minds together to know if the law would be enacted in the country, but same feedback. It would warrant them to thoroughly study the bankruptcy law so well. One of the Nigerians renowned barrister once said that “most people have not understood the reality of the law”
In proportion to the saying by Barrister Ben Okoye, cases involving bankruptcy is a very crucial one, and needs extreme attention. So this has made many Nigerians that wishes to file a bankruptcy case to go for pursue out-of-court resolutions of their financial disagreements.
According to him, he said clearly that they were a case he handled not quite long, a business man who came to him for a legal advice for an issue involving not being able to settle his creditors and was having a serious financial pressure from the creditor’s angle.
So due to the knowledge he had as a legal practitioner, he told the man that the only option he had was filling for bankruptcy. After listing the implications behind the Act, he condemned the suggestion. The man decided to settle out of court instead, “he narrated.
I know you must be wondering what the bankruptcy Act stated. The law states that a person can be declared bankrupt when he who cannot pay his debts of a specified amount and to disqualify him from holding certain elective and other public offices or from practicing any regulated profession (except as an employee).
Furthermore, it will interest you to know that a court of jurisdiction can declare total insolvent on any corporate organization that has failed to settle its creditors in terms of finance. Many self-acclaimed barristers have no idea about filing a bankruptcy case.
This is the main reasons why the bankruptcy law can’t be applied in Nigeria. Bankruptcy law is one of those laws that are noticed in compliance than in in-compliance. Bankruptcy law is still that law that has been overturned in Nigeria at any given space to be applied.
Talking about the procedures gearing towards filing for bankruptcy, most lawyers don’t know that. According to one Nigerian Barrister Ikechukwu Ikeji, he said that the court should declare bankruptcy to those companies that must have raised public funds through the capital market. But the court has failed to do that because they lack the proper knowledge of the law.
Many top Nigerian lawyers have called for the review of the law because of its ambiguity which is the main reason why it can’t be enforced properly in the country, so it can be able to be used by the future generation.
Because of its cumbersome nature, we are all scared to enforce it, because it requires lots of money, “they explained.
They also informed the country’s regulators to review the law again. The case of filing for bankruptcy has been recorded in the past years when Chief Cletus Madubugwu Ibeto was filled at the federal high court, Lagos state by the former Afribank Nigeria Plc. That later became Mainstreet Bank which was later sold to Skye bank in the long run.
This was because of his failure to pay the N11.4billion credit facility he borrowed from the bank. The annoying thing was that the case was sabotaged along the line.
Anyone who fails to pay up debts should be filed for bankruptcy, and the person in question should not be qualified to be an executive officer or the manager of any company, be it a corporative or personal company.