The Legal Regime of Bankruptcy and Winding up Proceedings as a Tool for Debt Recovery in Nigeria: An Appraisal

Abstract

Nigeria does not have a comprehensive policy or law on bankruptcy. Individuals are declared bankrupt while corporate bodies are insolvent in the event of individuals’ inability to meet his/her total liability. A corporation may be wound up if it is unable to pay for its debt. Bankruptcy and insolvency are used in our legal theory. But the paper examines legislation on bankruptcy laws and its proceedings which have to be amended to meet the current global economic growth, so that investors may have confidence on our legal system in order to recover their debts in case of corporate insolvency or regulation legislated upon bankruptcy. Bankruptcy deals with the creditor and debtor when the debtor is unable to pay the debt of a creditor and declares bankrupt. The article recommends corporate insolvency leading to winding up and liquidation of a corporate entity and settlement of all other related issues including cross-border claims and counter claim settlement and cross-border corporate insolvency should be codified and our jurisdictions should allow the debtor and the creditor to renegotiate on the basis of their respective rights and obligations at any time using ADR mechanisms.