Debt collection in Congo

The debt collection process in Congo 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 for debt collection and is actively engaged in commercial activities, then 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 early recovery of the debt.

The average time for informal out-of-court collection is up to 60 days (except in cases where a payment plan has been agreed upon). If this stage does not produce the expected results or after an initial analysis it becomes clear that it is not applicable, it is necessary to proceed to collection through the courts.

The Republic of the Congo is a member of OHADA (Organization for the Harmonization of Business Law in Africa), which includes nine approved Uniform Legal Acts applicable to all member countries of the above-mentioned organization. Therefore, the procedures for judicial debt collection, enforcement and bankruptcy are mainly regulated by the provisions of the relevant Uniform Acts.

Before initiating judicial collection, it is worth paying attention to the limitation period. The general limitation period under the national law of the Congo is 30 years. According to the provisions of the general commercial law OHADA, obligations arising from commercial transactions between merchants or between merchants and non-merchants expire after five years. The effects of the expiration of the limitation period apply in the court of first instance and on appeal only at the request of the debtor. The limitation period is interrupted by the recognition of the creditor’s claims by the debtor. After the interruption, the limitation period begins to run anew. The limitation period may be shortened or extended by agreement of the parties. However, it may not be shortened to less than one year or extended to more than ten years. The parties may also, by mutual agreement, supplement the list of reasons for the suspension and interruption of the limitation period.

Judicial debt collection in the Republic of the Congo is carried out in the ordinary judicial procedure and by order for payment.

The ordinary judicial procedure begins with the filing of an application in the registry of the court, after which the clerk of the court immediately issues the plaintiff or his representative a summons indicating the date of the hearing at which the case will be heard. A minimum of 30 days must elapse between sending the summons to the debtor and the date of the hearing. This period is extended to a maximum of three months if the defendant does not reside or stay in the Congo.

On the appointed day, the parties must appear in court in person or through their representatives. If the defendant fails to appear, provided that the summons has been served on him, the case may be heard without the defendant. If the court does not have evidence that the summons has been properly served on the defendant, the court shall order that the defendant be summoned again.

If the parties appear, at the beginning of the hearing the parties are invited to try to reach a settlement. If the parties agree, the case is referred to a settlement hearing, otherwise to a public hearing immediately following it. The settlement hearing is held by the court behind closed doors. In the event of settlement, an enforcement protocol is drawn up. Otherwise, the case is referred to a public hearing.

The case is heard in an adversarial manner. Each party is informed of the statements, written materials, arguments and documents of the opposing party and is given the opportunity to respond. After hearing the parties and reviewing the evidence, the court may make a decision if all the facts are clear and established. If the truth of the case is not established, the court orders the personal summons of the parties, the interrogation of witnesses, the conduct of an examination, the verification of the authenticity of documents, and the performance of other necessary measures. After completing these actions, the court holds debates between the parties and makes a final decision.

The procedure for issuing a payment order is governed by the OHADA Debt Settlement Procedure Act. It is used to collect debts arising from contracts, negotiable bills or cheques. To initiate this procedure, the creditor must apply to the court for a payment order, attaching documents proving the existence of the debt. If the court finds the application justified in whole or in part, it issues an order for payment of the specified amount. If the application is rejected in whole or in part, the creditor cannot appeal this decision and may file a claim under the standard court procedure.

Copies of the application and the payment order must be served on the debtor within three months. If this requirement is not met, the order becomes invalid. After receiving the documents, the debtor must either pay the debt within 15 days or file an objection within the same period. If no objection is filed, the payment order acquires the status of an enforcement document. If the debtor files an objection, the judge attempts to reconcile the parties. If successful, a conciliation act is drawn up, signed by the parties, one copy of which contains the writ of execution. If conciliation is not possible, the court will immediately hear the case and decide on the claim for recovery, even if the debtor who filed the objection is absent. This decision has the force of a ruling issued in the course of adversarial proceedings and replaces the original order for payment.

The decision of the court of first instance may be appealed to the court of appeal within one month from the date of the contested decision. The decision of the court of appeal may be appealed to the Supreme Court of the Congo within two months from the date of the decision. If the interested party is outside the country, the appeal period is three months. During the appeal period, the contested decision may be suspended at the request of the interested party if the execution of the decision would cause irreparable harm. The decision of the Supreme Court is final and cannot be further appealed.

Once the court decision has entered into legal force, the creditor must initiate enforcement proceedings. A judgment may be enforced for 30 years. Within the framework of the compulsory enforcement of a judgment, 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 the debtor’s property held by third parties.

An alternative method of debt collection is the initiation of bankruptcy proceedings against the debtor. In the Republic of the Congo, this procedure is regulated by the Uniform Insolvency Law OHADA. A creditor may initiate bankruptcy if its claims are undisputed, liquid and payable. If the debtor’s property is insufficient to fully satisfy the creditors’ claims, the law provides for the possibility of canceling transactions made by the debtor with the purpose of causing harm to creditors. Such transactions concluded between the suspension of payments and the beginning of bankruptcy proceedings include: gratuitous transfer of property; agreements where the debtor’s obligations significantly exceed the obligations of the other party; early repayment of debts that are not yet due; provision of security for previously existing obligations; any transactions concluded on a reimbursable basis, if the other party knew about the financial insolvency of the debtor. Cancellation of such transactions allows the lost assets to be returned to the liquidation estate, which increases the amount of funds to satisfy creditors’ claims and cover the costs associated with the bankruptcy procedure.

If you have any questions or need support on international debt collection in Congo, 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 CONGO

23.12.2024

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