Collective Proceedings for Wiping Off Debts and Its Implications on Bankruptcy Proceedings: An Appraisal of the OHADA Uniform Act on Simplified Recovery Proceedings
The Uniform Act on Collective Proceedings for Wiping off Debts entered into force on the 1st of January 1999 and governs all such proceedings commenced after that date. The urgent need for a modern system to deal with insolvency and related situations was felt on the member states whose legislation on the subject was obsolete. This Uniform Act is designed to remedy the problem by laying down procedures that are suitable for a modern business environment and providing collecting proceedings for the clearing of debts. Even though with the Act put in place the act of collecting funds has been difficult and complicated especially when the companies in question goes into bankruptcy or winding up. The judgment creditors find it difficult in recovery their debts from the judgment debtors, and this has to a larger extent affected the implementation of the judgment. The objective if this paper is in demonstrating the effects or implications that the failure in recovery the judgment debts can have on the creditors as a result of Bankruptcy of the companies. In other in solving this, it is assumed that the bankruptcy of the judgment debtors can affects the recovery proceedings by the judgment creditors.