Debt collection in Cyprus

The debt collection procedure in Cyprus begins with an assessment of the debtor’s solvency, his field of activity, the history of the enterprise, the availability of documentary evidence of the debt, current court cases and enforcement procedures, as well as the possibility of challenging the debt. This assessment determines the strategy that will be used on behalf of the client during the collection process.

If the debtor does not have current court cases or outstanding court decisions on debt collection, and he is actively engaged in commercial activities, then it is advisable to use the stage of amicable debt collection.

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

Interaction with the debtor begins immediately after sending the notification by mail, email, telephone or instant messengers. This process involves intensive communication with the debtor in order to apply constant pressure. The main task is to establish contact with key decision makers to achieve speedy debt repayment.

The average time for informal out-of-court collection is up to 60 days (except in cases where an installment plan for debt repayment 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 recovery through the procedures provided for by law.

Before initiating legal action, you should pay attention to the statute of limitations. The statute of limitations law sets six years for bringing claims from the date the debt arose. It should be borne in mind that the court has the right to extend this period to two years if it considers it reasonable given the circumstances of the case. To extend the statute of limitations, the creditor must submit a corresponding application to the court before initiating a claim. The limitation period may be interrupted in cases where the debtor acknowledged the debt in writing or paid at least 50% of the debt amount, including accrued interest.

Collection of receivables in Cyprus is carried out by filing a claim under the standard or alternative procedure (in the absence of a significant dispute on the facts) and through a simplified procedure.

The procedure for filing a statement of claim is carried out by registering a claim in court, after which the defendant is obliged to provide a notice of appearance within ten days. If such notice is not given, the creditor may ask the court to issue a decision in connection with the unregistered appearance of the debtor. If the debtor files a notice to appear in court, he must also file his defense to the claim. Further, according to the rules, the court sets a date for a court hearing at which the parties present their arguments and the court makes a final decision.

The simplified procedure is applicable to cases in which, in the opinion of the court, the plaintiff has no real prospect of success in the case or the defendant has no real prospect of successfully defending against the claim. Simplified decisions are made without litigation.

Any party to the dispute who is not satisfied with the final decision of the court of first instance has the right to appeal it on appeal within 42 days from the date of the decision. Filing an appeal does not stop the execution of the final decision. But in certain cases, the court may order otherwise with respect to execution. The time limit for consideration of an appeal is not established by law. As a result of consideration of the appeal, the court makes a decision, which comes into force from the moment of its adoption.

The Civil Procedure Rules provide for the possibility of using the European Payment Order procedure, which is applicable to cases of undisputed monetary claims between parties from European Union countries (excluding Denmark). To obtain a European payment order, you must fill out a standard application form and submit it to the court. The court accepts the payment order in closed session and sends it to the debtor, after which the debtor has 30 days to file its objections with the court. If the debtor files an objection, the court summons the plaintiff to inform his position on the case and, if it considers the debtor’s objection to be justified, cancels the payment order. In this case, the case is subject to consideration in civil proceedings. If the debtor does not submit any objections to the court, the payment order acquires the force of a final decision. The European Payment Order is recognized in all EU member states (except Denmark).

After receiving a final court decision, if the debtor refuses to voluntarily comply with the court decision, a writ of execution should be obtained and presented to the bailiff for execution. Satisfaction of the creditor’s demands in the process of forced execution is carried out through the seizure of funds and their write-off, seizure of property with subsequent sale.

If forced execution does not lead to positive results, if there are signs of bankruptcy (the debtor is unable to repay the debt, has committed an act of bankruptcy, etc.) and provided that the amount of the debt is at least 15,000 euros, then it is advisable to initiate bankruptcy proceedings. Within the framework of this procedure, it is possible to judicially cancel fraudulent/fictitious transactions of the debtor aimed at withdrawing their assets in order to avoid debt repayment through the forced sale of such assets.

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

# DEBT COLLECTION AGENCY CYPRUS

06.02.2022

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