Debt collection in Algeria

The debt collection process in Algeria begins with an assessment of the debtor’s solvency, their business sector, the history of the business, the availability of documentary evidence of the debt, ongoing court cases and enforcement proceedings, and the possibility of disputing the debt. This assessment determines the strategy that will be used on behalf of the client in the collection process.

If the debtor has no ongoing court cases or outstanding judgments on debt collection and is actively engaged in commercial activities, it is advisable to use the out-of-court debt collection stage.

This stage involves active negotiations with the debtor in order to reach an agreement on the payment of the creditor’s claims or other possible settlement options (e.g. return of goods, transfer of the debt to a third party, exchange of services or goods).

Interaction with the debtor begins immediately after sending a notice by mail, email, phone or instant messengers. This process involves intensive communication with the debtor in order to exert constant pressure. The main objective is to establish contact with key decision makers to achieve the fastest possible debt recovery.

The average time for informal extra-judicial collection is up to 60 days (except in cases where a debt repayment installment plan has been agreed upon). If this stage does not bring the expected results or after an initial analysis it becomes clear that it is not applicable, you should proceed to collection through the courts.

Before initiating judicial collection, it is worth paying attention to the limitation period. The limitation period for debt collection is 15 years. The limitation period for debt collection on the basis of a bill of exchange is three years. The limitation period established by law cannot be changed by agreement of the parties. The consequences of the expiration of the limitation period are applied in court only at the request of the debtor. The limitation period is interrupted if the debtor explicitly or implicitly acknowledges the debt. After the interruption, the limitation period begins to count anew.

Algerian law provides for judicial collection of debts by ordinary court procedure and by order of payment.

The ordinary court procedure begins with the filing of a statement of claim with the court. The statement is immediately registered in a special register in the order in which it was received, indicating the details of the parties, the case number and the date of the first hearing. The court clerk records the case number and the date of the first hearing on copies of the opening statement and transmits them to the plaintiff for official notification of the debtor. A minimum period of twenty days must be observed between the date of service of the summons and the date of the first hearing. This period is extended to three months if the defendant is outside Algeria.

On the day indicated in the summons to appear, the parties appear in person or through their lawyers. The documents to which the parties refer in support of their claims must be deposited in the registry of the judicial authority with notification of the other party. The parties exchange documents during the hearing or outside it through the court clerk. If the defendant fails to appear on the appointed day, the case is subject to consideration unilaterally on the basis of the materials provided by the plaintiff.

On the day of the hearing, the court listens to the parties’ positions, evaluates the evidence presented and, if it believes that all the facts and circumstances are clear, transfers the case to the decision-making stage. If the case is not ready for a decision, the court may, during the hearing, require the parties to be present in person to provide explanations or request documents necessary to resolve the dispute. The judge may also, at the request of the parties or on his own initiative, order an investigation of facts that may affect the outcome of the dispute. For this purpose, the case is transferred to the reporting judge to conduct the specified activities. After completing the investigation, the reporting judge prepares a report and returns the case for consideration and decision-making. After transferring the case to the decision-making stage, the court evaluates the results of the investigation, holds debates and makes a decision on the merits.

The order for payment procedure is used to collect a debt in a clearly defined amount, which is subject to immediate execution, confirmed by written documents (in particular, an unofficial document containing an acknowledgement of the debt or an obligation to pay it, or an invoice certified by the debtor). To implement this procedure, the creditor should file an application with the court in the form of a petition in two copies with the attachment of documents confirming the debt. If the debt is confirmed, the court makes a decision on the application within five days from the date of filing the application. Otherwise, the application is rejected. The decision to reject is not subject to appeal. In this case, the creditor should collect the debt through the usual court procedure.

The order for payment must be served on the debtor within 15 days from the date of its issue. After receiving the order for payment, the debtor has 15 days to pay the debt or file an objection. If the debtor does not file an objection, the payment order becomes an enforcement document. If the debtor files an objection, the court will consider it in an expedited manner and decide to cancel the issued order or leave it in force.

The decision of the court of first instance may be appealed to the court of appeal within one month from the date of notification of the contested decision. An appeal is not allowed if the amount of the debt does not exceed 200,000 Algerian dinars. The decision of the court of appeal may be appealed to the Supreme Court of Algeria within two months from the date of notification of the contested decision. Filing a cassation appeal does not suspend the contested decision. The decision of the Supreme Court is final and cannot be appealed further. The above appeal periods are extended by two months if the interested party is outside the territory of Algeria.

After the court decision comes into legal force, the creditor should initiate the enforcement procedure. The limitation period for the enforcement of a court decision is 15 years. Within the framework of the enforcement of a court decision, the creditor’s claims may be satisfied by seizing and writing off funds from the debtor’s accounts; seizing the movable and immovable property of the debtor with their subsequent sale; seizing and confiscating securities; seizing and confiscating company shares, seizing and confiscating the debtor’s property that is in the hands of third parties.

An alternative option for collecting a debt from a company or an entrepreneur is the bankruptcy procedure of the debtor. According to the Commercial Code of Algeria, the creditor has the right to initiate this procedure if the debtor has stopped making payments. Within the framework of the bankruptcy procedure, if the debtor’s assets are insufficient to fully satisfy the creditors’ claims, it is possible to cancel the debtor’s transactions made since the cessation of payments and with the intent to cause damage to creditors. Such transactions include, in particular: all gratuitous transactions that transfer ownership of movable and immovable property; all transactions in which the debtor’s obligations significantly exceed the obligations of the other party; repayment of debts for which the payment period has not yet arrived; provision of collateral for previously incurred debts; any transactions in which the other party knows that the debtor has stopped making payments. In certain cases, the court may also invalidate gratuitous transactions concluded during the six months preceding the date of termination of payments. As a result of the cancellation of the above actions and transactions, it is possible to return back to the debtor what he lost from such transactions and, due to this, increase the liquidation estate to satisfy the claims of creditors and cover the costs of implementing the bankruptcy procedure.

If you have any questions or need support on international debt collection in Algeria, our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us to get additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY ALGERIA  

26.11.2024

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