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Debt collection in Cyprus

Debt collection in Cyprus

Updated on Monday 05th June 2017

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Sometimes, when a company is facing financial problems, it’s difficult to pay the creditors. In this exceptional cases, collection agencies or a law firm in Cyprus may be hired to recover some of the creditor’s losses. Usually, there is a fee or a part of the recovered debt that must be paid to these agencies.

Forbidden debt collection methods in Cyprus

There are some forbidden practices in the Cypriot debt collection procedure for a debt collector or lawyer to use in his attempt to determine a debtor to pay its dues. It’s forbidden for a collector to use abusive language, to make public a list with the debtors (even though he can provide this information to other agencies) or to harass the debtor with numerous calls.

Also, the credit collector cannot use false statements in its attempts to recover the dues or using another identity. Accusations of any kind cannot be addressed to the debtor. The creditors cannot send a notification that looks like official documents, cannot give false information regarding the debtor to other agencies or use a false company name.

We also invite you to watch the video below on the debt recovery procedure in Cyprus:

Another forbidden action is that the creditor cannot collect more debit than it supposed to, except the case where the state law provides so.

Debt collection policy in Cyprus

The collection agencies and law firms in Cyprus can also assist the creditors during the trials against the debtors.

To enforce payment of the dues, the debtor must be judged by an authorized Court. A fee must be paid for issuing the case to the court. The value of it is regulated by the Company Registrar according to the court regulations. The judgment costs are usually paid by the defendant but it’s not a general rule, the judge may dispose that both parties must pay their part.

Normally, if the procedure for debt claiming is not disputed, the average time from the issue of proceedings to the judgment doesn’t take longer than a month.

A petition of bankruptcy can be filled only if the judgment was issued against the debtor.

After the judgment is issued, the procedures of enforcement may begin. The debtor’s assets may be object of the enforcement if the Court decides so. A subpoena for confiscation and sale of the surety's movable property can be emitted. The surety’s movable property must be part of public auctions.

If a loading order over the immovable assets of the debtor has been recorded with the Land Registry, a sale of it may be ordered if it’s necessary to cover the debtor’s dues.

The debtor’s assets may be frozen before the judgment issue by applying some measures after the claim was registered to the Court but only under some special circumstances. The immovable and movable properties can be part of the special seizure.

Out-of-court negotiations in Cyprus

Before forwarding the issue to an authorized court, there will be attempts to resolve the debt collection in Cyprus through out-of-court negotiations.
 
This implies finding out as much as possible about the debtor and about his financial status. Then, our attorneys in Cyprus will write a letter of claim and send it to the debtor, summoning him or her to acquit the debt within a certain time frame, usually of 7 to 10 days.
 
In case the debtor does not respect his or her financial obligations within this timeframe, our lawyers will then attempt to negotiate with him or her. In our experience, there are numerous debtors who will opt to settle their debts at this point.
 
Eventually, if the negotiations are not successful, we will initiate the proceedings with an authorized court against the debtor. 

Enforcement methods in Cyprus

After the final court has made the decision and if the debtor refuses or fails to comply with the debt payment, our Cypriot lawyers can use the following procedures to recover the debt:
 
issuance of immovable writ;
issuance of delivery writ;
writ movable issuance;
sale of land writ;
attachment writ;
bankruptcy proceedings;
garnishee proceedings.
 
Cypriot debt collections can be effectuated not only inside the country, but abroad, too. Therefore, even though a debt was made in Cyprus, if the debtor moved out of the country at a later date, a court action may be submitted and then the debt repayment can be enforced in the debtor’s country of residence.
 

If you need assistance in a debt collection in Cyprus, we invite you to contact our Cypriot law firm.

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