Debt Recovery Management cheat sheet

Insolvency regimes and the legal framework

• Individual insolvency in Kenya is governed by the Insolvency Act, 2015, which replaced the Bankruptcy Act and added rescue-oriented alternatives alongside traditional bankruptcy.
• A partnership has no separate legal personality, so partners generally bear personal, often joint and several, liability for its debts; a company's insolvency is legally distinct from its shareholders' and directors' own position.
• The Debt (Summary Recovery) Act gives a simplified, expedited procedure for straightforward, undisputed debts, faster and cheaper than an ordinary civil suit.
• The Limitation of Actions Act sets the time within which a creditor must sue, commonly six years for simple contract debts; where fraud, mistake or ignorance of a material fact applies, time may run from discovery instead.
• A written acknowledgement or part payment revives even a statute-barred debt, creating a fresh cause of action from that date (Shire v Thabiti Finance Co. Ltd).