How to Recover a Debt in Kenya: Demand Letters, Small Claims Court and Beyond

Whether you are a supplier with unpaid invoices, a landlord owed rent, a SACCO with defaulted loans or an individual who lent money to a friend, getting paid can be frustrating. The good news is that Kenyan law offers effective tools. Here is how to recover a debt in Kenya, from the simplest step to full enforcement.

Step 1: Gather your evidence

Before taking action, collect everything that proves the debt:

• Contracts, loan agreements, LPOs or delivery notes
• Invoices and statements of account
• M-Pesa or bank transfer records
• Emails, SMS and WhatsApp messages acknowledging the debt

An acknowledgment of the debt in writing is powerful evidence — and can also restart the limitation period.

Step 2: Send a formal demand letter

A demand letter from an advocate resolves a surprising number of debts. It sets out what is owed, gives a deadline (commonly 7 to 14 days) and warns of legal action. It shows you are serious, and in court it demonstrates that you gave the debtor a fair chance to pay.

Step 3: Negotiate a repayment plan

If the debtor genuinely cannot pay in full, a signed repayment agreement with instalments and a default clause may recover more money, faster, than litigation. Your lawyer can make the agreement enforceable, for example by recording it as a consent judgment.

Step 4: File a claim in the Small Claims Court

For claims of up to KES 1,000,000, the Small Claims Court offers a fast and affordable route. Claims must generally be determined within 60 days, procedures are simple and costs are low. It handles contract, goods and services, money had and received, and certain liability claims.

Step 5: Sue in the Magistrates' Court or High Court

Larger or more complex claims are filed in the Magistrates' Court or High Court depending on the amount. Where the debtor has no real defence, your advocate can apply for summary judgment to avoid a full trial.

Step 6: Statutory demand under the Insolvency Act

For undisputed debts above the prescribed minimum, a statutory demand under the Insolvency Act, 2015 gives the debtor 21 days to pay. Failure to pay can form the basis of bankruptcy or liquidation proceedings. This is powerful leverage, but should only be used where the debt is genuinely not disputed.

Step 7: Enforce the judgment

Winning a judgment is only half the battle. If the debtor still does not pay, the court can order:

• Attachment and sale of the debtor's movable property through licensed auctioneers
• Garnishee orders directing banks or third parties holding the debtor's money to pay you
• Attachment of land or salary in appropriate cases

Before you sue: a quick checklist

• Can you trace the debtor? Confirm their full name, ID or company number and physical address
• Do they have assets or income? A judgment is only as valuable as your ability to enforce it
• Is the debt disputed? Undisputed debts are faster and cheaper to recover
• Is there security? A guarantee, charge or chattel may give you a quicker route to payment

Special situations: landlords and SACCOs

Landlords owed rent may, in appropriate cases, recover arrears by levying distress through a licensed auctioneer under the Distress for Rent Act, as well as by suing. SACCOs and lenders can often rely on guarantors, deductions from deposits or realisation of security in line with their by-laws and the loan documents. Because these remedies are strictly regulated, always follow the correct procedure to avoid claims against you.

Interest and costs

If your contract provides for interest on late payment, you can generally claim it. Where it doesn't, the court may still award interest on the judgment sum. Courts ordinarily award legal costs to the successful party, which reduces the net cost of recovery.

Is it worth pursuing?

Not every debt should go to court. Compare the amount owed with the likely costs, the time involved and — most importantly — the debtor's ability to pay. Sometimes a discounted settlement paid quickly is worth more than a larger judgment that cannot be enforced. For businesses, a clear credit policy — deposits, credit limits, written terms and prompt follow-up of overdue invoices — prevents many debts from arising at all.

When the debtor is a company in financial difficulty

If a company debtor is struggling, act quickly. Other creditors may already be taking action, and the company could enter administration or liquidation, where unsecured creditors often recover only a fraction of what they are owed. Your advocate can advise whether to file a claim promptly, negotiate security, or participate in the insolvency process to protect your position.

Know the time limits

Claims based on contract must generally be filed within six years of the debt becoming due under the Limitation of Actions Act. Don't wait — the older a debt, the harder it is to recover.

Collect lawfully

Harassment, threats, public shaming or seizing property without a court order can expose you to liability. Always use lawful channels.

We recover debts for businesses and individuals

If you need to know how to recover a debt in Kenya quickly and lawfully, our debt recovery lawyers handle everything from demand letters to auctioneer enforcement, for single debts and entire loan portfolios. Contact us to start recovering what you are owed.