Debt collection in Armenia

The debt collection procedure in Armenia begins with an analysis of the financial capacity of the debtor, his field of activity, the history of the enterprise, the availability of documentary evidence of the debt, current court cases and initiated enforcement procedures, as well as the possibility of contesting the debt. This analysis forms the strategy that will be used on behalf of the client to recover the debt.

If there are no open lawsuits against the debtor or unexecuted court decisions on debt collection, and if he is actively engaged in his business, then it is advisable to use amicable debt collection.

This stage is based on active negotiations with the debtor to reach an agreement regarding payment of the creditor’s claims or other settlement options (for example, return of goods, transfer of debt to a third party, exchange of services or goods).

Interaction with the debtor begins with sending a notification via mail, email, telephone or instant messengers. This process involves intensive communication with the debtor to put pressure on him. The main goal is dialogue with key decision makers in order to speed up debt repayment.

The average term for out-of-court collection is up to 60 days. If this stage does not bring the expected results or if after an initial analysis it becomes clear that it is not applicable, then you should proceed to recovery through the court.

The statute of limitations in Armenia is 3 years. The law prohibits changing the specified period by agreement of the parties. If the statute of limitations has been missed, the creditor has the right to file a lawsuit to collect the debt, but if the debtor files an application with the court to apply the consequences of missing the statute of limitations, then the claim will be denied. The statute of limitations is interrupted due to the debtor committing actions that indicate recognition of the debt. After the interruption of the term, the three-year period begins to be calculated anew.

Before going to court, you should pay attention to the procedure for resolving the dispute, which the parties provided for in the contract. Therefore, if the parties have established that the disputes that have arisen will be resolved through a claim settlement procedure, then before filing a claim in court, it is necessary to fulfill the stipulated condition. Otherwise, the statement of claim will be returned to the plaintiff.

The legislation of Armenia provides for three types of debt collection through the court, by issuing a court order, in the order of general consideration and expedited trial.

The procedure for issuing a court order applies to certain monetary claims. A claim is considered certain if it is determined by agreement of the parties or can be accurately determined on the basis of law or contract. To carry out this procedure, an appropriate application with evidence of the debt must be submitted to the court. Within two weeks from the date of filing the application, if the requirements are justified, the court, without convening a court hearing, issues a court order, which is sent to the debtor no later than the next day. The court cancels the court order if the debtor, within two weeks of receiving it, submitted his objections to the court, or paid the debt under the court order, or the court order was not delivered to the debtor due to the impossibility of delivering it to the address of the debtor specified in the application. If the court order is canceled, the case must be considered in the general manner. If within two weeks from the date of receipt of the court order the debtor does not file an objection to it, then the court order comes into force and can be presented for forced collection of the debt.

The general procedure for litigation is carried out by filing a statement of claim in court. In this case, the plaintiff is obliged, before filing a claim in court, to hand over a copy of it with all attachments to it to the defendant. The period for consideration of the case in the court of first instance is not established by the Civil Procedure Code. The decision of the court of first instance comes into force within one month from the moment of its announcement, unless it is appealed.

An expedited trial is applicable to cases in which the debt is based on a written agreement and the defendant does not dispute it. The court issues a ruling to consider the case in an expedited manner after the expiration of the deadline for the defendant to file his objection to the claim. After issuing the said ruling, the court, within fifteen days, makes a decision on the merits of the dispute, which comes into force within fifteen days from the date of its issuance and provided that no appeal is filed against it.

An appeal against a court decision is considered within three months from the date of opening the appeal proceedings. As a result of considering the appeal, the appellate court adopts a ruling, which comes into force one month from the date of announcement.

Each of the parties to the case has the right to file a cassation appeal with the Court of Cassation before the end of the period established for the entry into force of the decision of the appellate court. The deadline for considering a cassation appeal is not specified by law, but this period must be reasonable. As a result of consideration of the cassation appeal, the court adopts a ruling, which comes into force from the moment it is issued, is final and is not subject to appeal.

After the court decision enters into legal force, provided that the debtor refuses to comply with it voluntarily, you should obtain a writ of execution and initiate enforcement of the court decision in the service for ensuring the enforcement of judicial acts. The creditor has the right to present a writ of execution to the executive body within one year from the date the court decision enters into legal force. Satisfaction of the creditor’s claims in the process of forced execution is carried out through the seizure of funds and their write-off, seizure of property with subsequent sale, foreclosure on the debtor’s property held by other persons. According to the law, the period for compulsory execution is two months from the date of commencement of proceedings, but in reality it is much longer.

If forced collection of debt becomes impossible due to insufficient property, the bailiff is obliged to immediately suspend enforcement proceedings and, within a month, file an application with the court to declare the debtor bankrupt. This procedure provides for the possibility of bringing the controlling persons of the debtor to subsidiary liability for the debts of the debtor in cases where they did not independently initiate bankruptcy within ten days after signs of bankruptcy appeared. Vicarious liability is also provided for the bailiff in case of failure to fulfill obligations to initiate bankruptcy proceedings of the debtor.

An alternative way to collect debt is to bring the debtor’s officials to criminal liability in accordance with Art. 353 of the Criminal Code of the Republic of Armenia for intentional non-execution by an official of a court decision that has entered into legal force or obstruction of its execution.

If you have any questions or need support regarding international debt collection in the Republic of Armenia, our company is ready to provide our expert assistance to effectively resolve your debt issue. Please contact us to receive additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY ARMENIA

06.02.2022

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