Debt collection
Debt collection

“Professionalism is important, and professionalism means you get paid.”

                                                                                                                                Erica Jong


Debt collection can be a very stressful, unpleasant and extremely difficult procedure, especially in jurisdictions such as the Republic of Cyprus where the legal and court system is practically non-existent when it comes to protection of rights.  At Arnos, we understand that the collection of a debt no matter how small can be the turning point your business needs in a time of financial difficulty and can help you find the right solution to handle your creditors whether it be in Cyprus or another jurisdiction worldwide specifically tailored to your particular circumstances.  This article aims to outline just some of the possible resolution options when it comes to debt collection in Cyprus. 

Out of Court Negotiations and Procedures

One of the best ways to get debtors to pay their debt is to use the judicial system to pressure them into negotiating and resolving the issue without having to go to court.  Prior to commencing any procedures that may warn or alarm the creditors, it is highly important to conduct all the necessary searches and investigations on the debtor’s finances and assets, whether explicit or hidden.  This will not only provide leverage during the negotiation process but will also act as a failsafe in the case that negotiations fail.  Knowing the assets and their value in advance, will allow us to move quickly and apply the necessary restrictive measures for potential recovery before any litigation procedures begin thus preventing the creditor from hiding or transferring those assets.  

Once all the necessary information is gathered and our team has studied your case, we can take on the negotiations with your debtors on your behalf.  Research shows, that having a legal representative mediate the process from the start, in itself, adds pressure and severity to the case in the eyes of the debtor and thus increases the chance of a positive result or a mutually satisfactory counter proposal during negotiations. 

Application through the Cyprus Court

Demanding the repayment of a debt is challenging on its own, but when one has to appeal to the Cyprus court, the challenge can become even greater and costlier.  Our firm has handled numerous cases in Cyprus and despite our high success rate, we always advise our clients that appealing to the Cyprus court should always be a last resort option because, in fact, Cyprus is one of the slowest jurisdictions in the world when it comes to court hearings.  The average waiting time for a court decision is approximately 2,500 days and can require a lot of resources and funds on legal representation without guaranteeing satisfactory results.  What’s more, even after spending over a decade in court, a decision in your favor, will not guarantee the collection of your debt.  In fact, there are many ways debtors can avoid repaying creditors.

Court Order on Debt Repayment via Monthly Instalments

At any point during the court proceedings, the court may determine that the debtor is to repay the debt in installments of certain amounts in a specific timeframe set at the discretion of the court, in accordance with Section 90 of the Civil Procedure Law (CAP. 6).  The problem with this however, is that the sum of the installments may be so low that the debt will take years to be repaid or the debtor may decide not to pay the installments at all.  In such a case an additional application will need to be filled to the criminal court which can also can take years to rule on a decision. 

Writ of Movable Property 

A court ruling on the confiscation of movable property may be considered in certain circumstances as an effective method for enforcing a court decision.  In essence, this is a court order allowing the Bailiffs to seize movable property and sell it at a private auction in favor of the creditor.  This however, can also have its limitations as this allows for a third party to file a claim for the property in whole or in part, which can cause additional complications for the creditor. 

Court Order for the Sale of Real Estate or an Imposition 

According to article 53 of the Civil Procedure Law (Chapter 6), a creditor has the right to register the court decision against the debtor with the regional land registration department and this can act as security for the repayment of the debt.  Such a restrictive registry entry will be valid for a period of 6 years.

Court Order – Writ of Execution

In the event that the debtor does not own any property, whether movable or immovable, there is an alternative way to execute the court decision, referred to as the “writ of execution”.  This is applicable and can prove useful when the debtor has a personal interest or is entitled to any funds or assets held by other persons.   For example, a credit balance with a bank, an unpaid debt, inheritance or an investment payout.  Knowledge of such an asset grants the creditor the opportunity to apply to the court for the issuance of a writ of execution of this property held by the third party.  When such a court order is issued, all such property becomes a pledge to satisfy the claim of the creditor who has received the court decision.  The Law provides guidance for a special procedure to be followed in such cases and the right to object for all involved parties.

No matter how complex your case, at Arnos, we have a deep understanding of the debt recovery process and employ a team of qualified professionals in legal and administrative proceedings.  Our team has the experience to conduct a thorough investigation on your behalf, advise you on the best course of action based on your particular circumstances and assist you with the entire process of your debt collection whether it be through negotiation or legal action.  Please feel free to contact our legal team for a complimentary professional and confidential consultation. 

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