Debt Recovery and Insolvency Lawyers Across Kenya

Debt recovery and insolvency are two sides of the same commercial reality: money that is owed and cannot or will not be paid. A debt recovery and insolvency lawyer, formally called an advocate, pursues unpaid debts through demand letters, court proceedings, and enforcement, and advises on the formal insolvency procedures available where a debtor or company cannot meet its obligations. Whether you are a creditor trying to recover what you are owed, a director navigating a company in financial distress, or an individual facing bankruptcy proceedings, the right legal advice can make a significant difference to the outcome. This page lists verified debt recovery and insolvency lawyers in Kenya and explains how both areas of law work.

Recovering a Debt in Kenya

The starting point in most debt recovery matters is a formal demand letter requiring payment within a specified period. Where the debtor does not pay, the creditor can file a civil suit in the appropriate court, the magistrates’ courts for smaller amounts and the High Court for larger ones, obtain a judgment, and then enforce it. Enforcement mechanisms include the attachment and sale of the debtor’s property, garnishee orders (requiring a third party who owes money to the debtor to pay the creditor directly), and charging orders over land. A debt claim must generally be brought within six years of the debt becoming due under the Limitation of Actions Act. A lawyer can assess the most efficient route for your particular claim and handle the proceedings.

Corporate Insolvency

The Insolvency Act, 2015 governs corporate insolvency and provides three main regimes as alternatives to, or as part of, winding up a company. Administration is aimed at rescuing the business as a going concern: an administrator is appointed to manage the company’s affairs, and the company is protected from creditor action while the administrator attempts to achieve a better outcome than immediate liquidation. A Company Voluntary Arrangement (CVA) is a formal agreement between the company and its creditors on how the debt will be dealt with, requiring the approval of seventy-five per cent of creditors by value. Liquidation, either voluntary or court-ordered, is the final process: the company’s assets are realised and distributed to creditors in order of priority, and the company is dissolved. Directors who continue to trade when they know the company is insolvent face personal liability.

Bankruptcy of Individuals

Bankruptcy proceedings under the Insolvency Act apply to natural persons who cannot pay their debts. A creditor owed more than the prescribed bankruptcy level (currently KES 250,000) can serve a statutory demand on the debtor, and if the debt remains unpaid for twenty-one days, apply to the High Court for a bankruptcy order. The court appoints a trustee in bankruptcy, who takes control of the bankrupt’s assets, realises them, and distributes the proceeds to creditors. A debtor who has engaged a lawyer to respond to a statutory demand, challenge a bankruptcy petition, or apply for voluntary bankruptcy will be in a much stronger position to protect their interests. An individual can also make their own bankruptcy application where they genuinely cannot pay their debts.

Statutory Demands

A statutory demand is a formal written demand for payment of a debt that is the starting point for both personal bankruptcy and corporate liquidation proceedings. For a company, a statutory demand for a debt exceeding KES 100,000 that remains unpaid for twenty-one days is evidence of insolvency and can be the foundation of a liquidation petition. For an individual, a statutory demand for a debt exceeding KES 250,000 can similarly found a bankruptcy application. A statutory demand must meet formal requirements, and a debtor has the right to apply to court to set it aside where it is disputed or technically defective. A lawyer can advise on whether to serve or to respond to a statutory demand.

How to Choose a Debt Recovery Lawyer

Match the lawyer to your situation, whether simple debt recovery or complex insolvency, confirm they are registered, and act before limitation periods expire.

• Confirm the lawyer is a registered advocate with the Law Society of Kenya
• Choose a lawyer experienced in debt recovery and, for insolvency, in the specific regime you need (administration, CVA, or liquidation)
• Act within six years of the debt becoming due: missing the limitation period bars the claim
• Keep records of the debt, the agreement, invoices, and all correspondence from the start
• Ask how they charge and get a written fee agreement before work begins