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Any Basis For Bank Debt Cancellation For Young Entrepreneurs?

A group of young entrepreneurs took a loan 3years ago from a nigerian bank.the bank gladly approved the loan based on collateral provided by a friend's dad. Unfortunately,the transaction failed and the only sales they made could only fetch one-fifth of the loan given.now the interest rate has skyrocketed and the outstanding payment is almost thrice the initial loan.sincerely,these young men dont have anything up till now and the bank is threatening to now sell the collateral which belongs to an elderly man that just gave it to them as an assistance without any string attached. These young men are now depressed.Just decided to share this for your advises-is there any way a nigerian bank can cancel this debt?

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were the properties documents perfected by the bank as at the time of approval of the Loan. A lot of these banks make alot of silly mistakes that non-financial/legal people dont know about. On a good day wen a loan goes bad and the collateral perfected the banks doesnt send more that 2 mails asking for payment, once the loan goes bad they automatically commence the sale of the property. I am sure they did not perfect the docs (alot of them dont) and if that is the case they cannot unilaterally sell the property.

my advice is dat u approach dem asap with a repayment plan probably get a good project for them to finance.

give me the load-down of the transaction thru my email - tisanigeria@gmail.com.

God be with you. do everything with God's guidiance.

tnx

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Do we have bankruptcy laws in Nigeria?

The best thing to do is hire a lawyer to help with lowering interest rate and come up with a new payment plan.

It will also help to know what kind of bank (is it the desperate ones that need money badly)?

Nigerian youths should realise you do not start a business from scratch with a loan from banks in Nigeria, unless the collateral is not important.

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Technically, the bank owns the collateral until all debts are settled. Even if filling bankruptcy is possible, the collateral can’t be protected.

The whole idea of taking a collateral before giving loans is to allow the lender to have something to hold onto incase the borrower cant repay, it is just unfortunate that the old-man did not factor this into his thinking before giving out his property.

If you can connect with the banks executives on a personal level; they have done more for their friends and family.

The guys should comeup with another plan, but this time they should start small, and work extra-hard (if only for the sake of the old-man). They may need a lawyer to negotiate with the bank, else the interest will be increasing and their collateral will not appreciate.

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If all else fails, (which I hope it doesn't), one of the only (legal) ways of debt cancellation which I know of is filing for bankruptcy. When a person is declared bankrupt by the court, all their debts are wiped off and they have to start on a clean financial slate. Otherwise, I think they would need to find other ways of coming up with the money.

When the young chaps were going into the business partnership, did they have a back-up plan, or an exit strategy? If they did, this is the time to pull the trick out of the bag. Can they sell the failing business to an existing business which needs to expand into that area or something? 

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if i may ask which type of biz are they into. if it is a kind of biz that is not genuine people may not assist in discussing with the bank officials even the private org. to cancle the debt.

Nevertheless, the banks should still consider the old man who stood for them.

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