In a financial pinch, many turn to informal lenders and end up facing "loan-shark interest" and "threatening collection" that makes things far worse. The key point: debtors have more legal rights than they think.
Interest above the legal rate isn't fully enforceable
Charging interest above the rate set by law is not recognised — the excess may be unrecoverable, and in some cases lending at unlawful rates can be an offence. So a debtor doesn't always have to pay what's demanded — have a lawyer check.
Illegal debt collection
Collection that threatens, uses violence, shames you in front of others, contacts you at unreasonable hours, or discloses your debt to outsiders may be illegal and carry penalties. If you're collected from this way, you can gather evidence to act on it.
What to do
- Keep all evidence — contracts/receipts, messages, transfers, records of the collection.
- Don't sign documents or accept an incorrect debt amount before checking.
- Consult a lawyer to review the interest and validity of the debt, plus options to negotiate or contest.
📌 See more: civil litigation & enforcement · debt collection & enforcement guide (for creditors)
If you're suffering from an informal debt or aggressive collection, talk to our team to know your rights and find a safe way out.