Legal Question in Credit and Debt Law in Nigeria

HI

My appointment was recently terminated by my employers (Stanbic IBTC Bank Plc �Nigeria) against my wish (involuntary termination) on grounds of �SERVICES NO LONGER REQUIRED� � Without any fault.

They calculated my total terminal benefits and net it off with my total outstanding loans but my total terminal benefits is by far less than my total loans at the point of termination thereby leaving me with a net outstanding loans(obligation} to pay.

My employers requested that I should arrange to settle the outstanding loans failure to which, it will continue to attract the prevailing commercial interest rate on lending.

However under staff loan scheme, I applied and on approval, I signed a loan agreement with my employers which clearly states:-

� Repayment source � My monthly salary

� Mode of payment � Monthly installments of a pre determined amount to be deducted at source from my salary until full repayment of the loans

� Collateral for the loans � Nil

� In event of termination, the employer will offset any outstanding loans against employee total terminal benefits.

Apart from my monthly salary, there was no reference of any other repayment source in the agreement before or after termination.

Now my Questions!

Given these terms as contained in the loan agreement and the fact that the termination was at the instance of my employers and against my own wish (involuntary termination)and more so the repayment source ceased automatically:-

1. Is there any legal ground for me not to repay my outstanding loans with them?

2. What is the best method to resolve this problem?

3. I am currently planning to sue them � Please advise

4. The purported termination letter served on me was a scan/photo copy � Is it valid?

Thanks

Ali Musa

E-mail � [email protected]


Asked on 4/24/12, 9:36 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

25.04.2012

Dear Ali Musa,

When the termination of your service has been involuntary at the behest of the Bank, you will have to read the terms and conditions of the Loan Agreement in conjunction with the prevailing Company Loan policy at the time of your applying and availing of the personal loan; as well as the terms and conditions mentioned in your Appointment Letter with the Bank.

To answer your questions -

1. Technically, the bank will not be entitled to force you to adhere to the time limit stipulated for repayment of the balance outstanding loan since you do not have any income avenue. The bank is also not entitled to charge you interest on two counts - they are in the business of lending monies and; they have involuntarily terminated your services and termination was not of your own accord.

2. You should request the bank to reinstate you in the employment of the Bank. Since you need to keep good present relations with your Bank for further reference for future employment intact, it is unwise to inform or commit to the bank to write off the overdue outstanding amount of loan. You may write a polite letter requesting for reinstatement of service, interest waiver, and elongated time frame for balance repayment till you fetch yourself another job, and are back in employment.

3. Please refrain from legal action - "The power of defence is thousand times the power of attack."

4. Please request the bank for the original signed termination letter with reason for termination of service clearly specified therein, which is required for your personal record.

You can mail me for further on-line legal advice at [email protected]

Regards,

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Answered on 4/25/12, 5:39 am


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