PUBLICATIONS

Debt Collection In Cyprus

INTRODUCTION

 The global economic crisis could not but have extended to Cyprus, too, and financial transactions taking place in Cyprus. Liquidity being a severe problem, it is nowadays paramount for businesses to collect what they are owed for goods and/or services provided.

 Our priority is that the debt is collected in the most time efficient way and with the least costs possible. We therefore seek to avoid litigation wherever possible. In many cases, we will collect the debt within few weeks by merely sending a letter of demand, through which we claim the amount owed to our client. Debtors generally take  seriously a letter of claim coming from a lawyer, rather than any letters from the creditors, themselves. Without any doubt, many debtors want to avoid legal proceedings against them and will be willing to settle their financial obligations out of Court.

 An easy way to collect the debt is through the mediation, which is a flexible and confidential procedure which helps the parties to find their common ground and work towards resolving their dispute by agreement. As a form of Alternative Dispute Resolution mediation is becoming increasingly popular. 

Issuing Court proceedings is the last case scenario, given that any other out-of-Court possible option has been exhausted. But, if a debtor is not willing to settle his debt and, therefore, comply with his financial obligations towards the creditor, then the judicial route of initiating Court proceedings against him is the only visible solution.

 We strongly believe that in today’s modern society and business world, special emphasis should be placed upon alternative dispute resolution mechanisms and out-of-court settlements for resolving disputes. Furthermore our Law Firm is ready to bring an action before any court when the circumstances require it.

PROCESS

  1. Advising the client:

The very first step we take is to hold a meeting or a conference call with the client, depending on the availability of the client, to discuss the case, review and examine all necessary documentation and see what legal options are available under the given circumstances.

  1. Out-of-court Negotiations:

After identifying the issue and, therefore, advising the client as to the best way possible to more forward and the procedures involved, under the given circumstances, we will then seek to find out as much as possible about the debtor and his financial credibility.

The next step is to prepare and send a letter of claim to the debtor, calling upon him to pay the debt within a fixed period, usually 7 or 10 days. If the debtor refuses and/or fails and/or denies to comply with his financial obligations within the set, by us, timeframe, then we will seek to negotiate with him. From our experience, they are too many those who will choose to settle their debts at this preliminary stage and negotiate a payment plan.

The last case scenario is when the negotiations fail and there is no other option than to move on with initiating Court proceedings against the debtor. In case we believe that the debtor has no financial credibility and would not be able to pay the creditor, even when a Court judgment against him is delivered, we would advise the client that it is not worth pursuing this matter in Court.

  1. Court Proceedings:

Having exhausted all possible out-of-Court legal options and following the instructions of the client, we will then proceed to issue Court proceedings against the debtor. Depending on the circumstances of each case, it may be possible and appropriate to file an interim order against the debtor’s immovable property or, even, freeze his bank accounts up until the amount owed to the creditor. It is important to mention, at this stage, that during the Court proceedings, there is always a possibility of settlement, without the need to reach the final Court stage, namely the hearing of the case.

  1. Ways to enforce a Court Judgment:

After the final Court judgment is delivered and if the debtor keeps refusing and/or failing and/or denying to comply with his financial obligations and the Court judgment against him, we can proceed accordingly and use the following procedures in order to execute the Court judgment against him:

  • Issuance of writ of movables;
  • Writ for the Sale of Land (MEMO);
  • Writ of Attachment;
  • Issuance of writ of immovables;
  • Issuance of writ of delivery;
  • Bankruptcy proceedings;
  • Garnishee proceedings.

Debt collections can not only be enforced in Cyprus but judgments may be executed abroad as well.  In other words even though a debt may be created in Cyprus but the debtor is later on moving out of the country, we may proceed with filing of a court action in Cyprus, serve the defendant abroad, then have the judgment issued in Cyprus and thereafter have it executed at the debtors country or state of residence.

Andria Papageorgiou
Advocate – Associate
AMG Mylonas & Associates, LLC


For further information and assistance through our services on this topic, please contact AMG MYLONAS & ASSOCIATES, LLC by telephone +357 25 101080 or by e-mail at info@mylonas.law


 

Disclaimer

This publication has been prepared only as a general guide and for information purposes. It does not constitute or should not be read as a legal advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case. No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication.