When a creditor seeks to recover unpaid receivables from a debtor in the Republic of Chad (hereafter “Chad”), it is essential to understand the local legal environment, the procedural steps available, and how an overseas (e.g., U.S.) creditor should organise its approach. This article outlines the typical debt collection in Chad process and offers practical recommendations for American exporters dealing with Chadian buyers.
1. Legal & regulatory framework
Chad is a member of the Organisation pour l’Harmonisation en Afrique du Droit des Affaires (OHADA), which means that certain uniform Acts apply across participating states—including Chad—governing commercial obligations, simplified recovery procedures and enforcement.
Under commercial law in Chad the limitation period for obligations between merchants or between merchant and non-merchant under OHADA law is five years. At the same time, national legislation may provide a general limitation period of up to thirty years for obligations.
These dual regimes (OHADA plus national law) are critical: for commercial transactions the shorter five-year period often applies; for others the longer term may apply.
2. Pre-judicial (out-of-court) collection
Prior to filing a lawsuit, the preferred first step in debt collection in Chad is to proceed by negotiation and informal demand. According to one report:
2. Pre-judicial (out-of-court) collection
Prior to filing a lawsuit, the preferred first step in debt collection in Chad is to proceed by negotiation and informal demand. According to one report:
“The debt collection procedure in Chad begins with an assessment of the debtor’s solvency … If the debtor … is actively engaged in commercial activities, then it is advisable to use the out-of-court debt collection stage.”
This stage typically involves sending written notices (by mail, email, instant messenger or telephone) to the Chadian debtor, pressing for payment or settlement (including return of goods, offset arrangements or a payment plan) and engaging in continuous communication to the decision-makers.
In practice the informal collection phase may last up to about 60 days.
The advantage for exporters is twofold: out-of-court collection can be faster, less formal, and avoids the costs and delays of litigation; and it often allows for preserving the commercial relationship.
3. Judicial debt recovery
If the informal stage fails or is not viable, the creditor may proceed to judicial recovery. Under the OHADA Uniform Act on Simplified Recovery Procedure and on Enforcement (AURVE) and other applicable rules, creditors may apply to the competent court for an injunction for payment when the debt is certain, liquid and due.
Key steps typically include:
- Filing a claim supported by documentary evidence of the debt (contract, invoices, delivery proof, correspondence).
- Ensuring the debt is liquid (i.e., amount is determined or easily determinable) and due (past maturity).
- Determining proper jurisdiction: courts under the OHADA regime (commercial courts or first instance courts) will consider the matter.
- Upon obtaining the judgment or injunction, the creditor can ask for enforcement measures (garnishment, seizure of assets, auction) subject to Chadian enforcement law.
The judicial path tends to be more time-consuming and more expensive than informal collection, so it is considered a “last resort”.
4. Enforcement and practical challenges
Once a judgment is obtained, the creditor must enforce it. In Chad, as elsewhere, this may involve seizing debtor’s assets, bank accounts or other enforcement measures permitted under law. The enforcement mechanisms under OHADA and national law must be used.
However, in practice American exporters and other foreign creditors should be aware of certain risks in Chad: difficulty identifying and locating sufficient debtor assets, weak transparency of debtor financial condition, possible language or cultural barriers, and logistical constraints of litigation in a foreign jurisdiction.
Moreover, the local statute of limitations must be carefully considered: if the claim is not brought within the applicable time (for example five years under OHADA for commercial obligations) the debtor may raise a statute-bar defence.
5. Recommendations for American exporters
For a U.S. exporter selling goods to a buyer in Chad and seeking to protect its interests and facilitate debt recovery, the following recommendations are crucial:
a) Draft clear contracts and payment terms
Before shipping goods, ensure your contract is clear and comprehensive: specify governing law (ideally include choice of law clause and appropriate jurisdiction), payment deadlines, interest for late payment if permitted, and remedy provisions. Maintain documentation: commercial invoice, delivery receipt (signed by buyer in Chad), correspondence and any acknowledgement of debt.
b) Prioritise pre-shipment risk assessment
Perform credit checks (or work via local Chadian correspondent) on the buyer’s financial position, payment history and business standing. If feasible obtain a guarantee, letter of credit, or other security. This reduces reliance solely on post-shipment debt collection in Chad.
c) Act early with demands
If payment is overdue, send a formal demand letter and follow up promptly. In the Chadian context, the informal negotiation stage is the most efficient. The quicker you engage the debtor, the more likely you are to recover debt before escalation. Document all efforts (emails, calls, notices) to demonstrate your diligence and to support any subsequent judicial claim.
d) Engage local counsel or debt-collection agent
Because local language (French and Arabic) and institutional knowledge matter, engage a Chadian-based law firm or debt-collection agency experienced in Chad. As one international agency notes, local offices cover all regions of Chad and handle collections in the debtor’s local language, which significantly improves prospects.
Such local counsel can assess solvency, guide selection of court jurisdiction, negotiate settlements, and execute enforcement measures.
e) Evaluate cost-benefit before litigation
Judicial recovery in Chad may involve time, translation costs, travel or local representation fees and uncertain enforcement outcomes. U.S. exporters should assess whether the debt size justifies litigation costs. If the debt is substantial and the buyer has identifiable assets, the judicial path may be warranted; if not, negotiation or debt sale may be more pragmatic.
f) Monitor limitation periods
Ensure that the claim is filed within the applicable statute of limitation (e.g., five years under OHADA for commercial obligations). Failure to act in time may result in the claim being time-barred. Hence documentation should clearly show when the obligation arose and when payment became due.
g) Preserve commercial relationship where possible
Debt collection in Chad should ideally balance firmness with diplomacy. Maintaining the ability to trade again may be a strategic asset. Sometimes reaching a settlement (partial payment, installment plan) is preferable to full judicial enforcement which may irreparably damage the buyer relationship.
Conclusion
In summary, debt collection in Chad is a two-stage process: first, out-of-court negotiation and demand, then—if necessary—judicial recovery via OHADA-governed procedures and Chadian courts. For U.S. exporters selling to Chadian buyers, the keys to success are solid contract documentation, early action on unpaid invoices, use of local expertise, cost-benefit evaluation of litigation, and awareness of limitation periods. With these precautions, an exporter can significantly enhance its chances of recovering debts in Chad and minimise risks associated with cross-border commercial credit.
This publication was prepared based on materials from the Grandliga website.
