Document background
The Debt Collection Settlement Letter is a crucial document used in Nigerian debt resolution processes when a creditor wishes to formally propose terms for settling an outstanding debt. It is particularly relevant when parties seek to avoid litigation or want to document a negotiated settlement. The document must comply with Nigerian financial regulations, including the Recovery of Debts (Banks and Other Financial Institutions) Act and Central Bank of Nigeria guidelines. It typically includes specific details about the original debt, the proposed settlement amount, payment terms, and the legal effect of the settlement. This type of letter is commonly used by financial institutions, businesses, and debt collection agencies operating in Nigeria, and can be applied to various types of debts, from commercial loans to consumer credit. The document serves both as a settlement offer and, when accepted, as evidence of the agreed terms.
