Debt collection in Guinea-Bissau

The debt collection process in Guinea-Bissau 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, current 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 current court cases or outstanding judgments for 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 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 Guinea-Bissau 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 collection of debt, 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 legislation of Guinea-Bissau is 20 years. According to the provisions of the general commercial law OHADA, obligations arising from trade transactions between merchants or between merchants and non-merchants expire after five years. The effects of the expiration of the limitation period are applied 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 cannot 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 Guinea-Bissau is carried out in the ordinary judicial procedure and in the order of issuing an order for payment.

The ordinary judicial procedure begins with the filing of a claim in court, after which the court, if the claim meets the procedural requirements, issues a summons to summon the defendant. The defendant may file objections within twenty days of receiving the summons. In the objection, the defendant must individualize the claim, separately set out the facts, legal grounds and conclusions of his defense.

The defendant is obliged to take a specific position on each of the facts set out in the claim. Facts that are not specifically contested are considered admitted if they do not contradict the general defense, are not unconfirmed or do not require documentary confirmation. Contestation by simple denial is not allowed. In the event of filing an objection, the court notifies the plaintiff thereof.

If the defendant fails to file an objection within the established time limit for objections, the facts set out by the plaintiff are considered admitted by the defendant. This provision is not accepted if the defendant is a legal entity or if the facts require documentary confirmation.

The plaintiff may respond to the defendant’s objection in a rejoinder. The rejoinder is filed within eight days of receiving the notice of the filing of the objection. The defendant may respond to the rejoinder with a counter rejoinder. The counter rejoinder is filed within eight days of the end of the period for filing the rejoinder. The absence of any of the specified procedural documents, or the absence of a challenge to new facts set out by the opposing party in the previous document, entails the consequences of recognizing such facts by default.

Upon completion of the filing of the procedural documents, if the judge finds that the dispute can be resolved without the need for additional evidence, a hearing is scheduled for deliberations within ten days. If the court finds that the issue of law can be resolved immediately or if the issue of fact is already fully clear, the court shall, after the hearing, issue a direct decision on the claim within fifteen days.

If the case continues, the judge will determine the key facts relevant to the case, note the facts admitted by admission, consent or documentary evidence and formulate questions to determine the disputed facts. After the list of questions has been approved, the court will notify the parties to submit a list of witnesses and other evidence. After all disputed facts have been resolved and final discussions have been held, the court makes a decision on the merits of the dispute.

The order for payment procedure is governed by the OHADA Debt Settlement Act and is used to collect debts arising from contracts, bills of exchange and cheques. To initiate such a procedure, the creditor must apply to the court for an order for payment, attaching documents evidencing the existence of the debt. If the materials submitted confirm the validity of the claims in full or in part, the court issues a corresponding payment order. In the event of a full or partial refusal to satisfy the application, the court’s decision cannot be appealed, and the creditor can only protect his interests by filing a claim within the standard judicial procedure.

A copy of the application and the payment order must be served on the debtor within three months, otherwise the order will become invalid. After receiving these documents, the debtor is obliged to either pay the debt within 15 days or file an objection within the same period. If no objection is received, the payment order acquires the status of an enforcement document. If an objection is filed, the judge organizes an attempt to reconcile the parties. If reconciliation is achieved, the judge draws up a reconciliation act, which is signed by the parties. One copy of this act contains the enforcement formula. If reconciliation is impossible, the court considers the case on the merits and issues a decision, even in the absence of the objecting debtor. Such a decision has legal force equivalent to a decision in adversarial proceedings and replaces the original payment order.

The decision of the court of first instance may be appealed to the court of appeal. The decision of the court of appeal may be appealed to the Supreme Court of Guinea-Bissau. The appeal period is eight days from the date of notification of the contested decision. The appeal filed suspends the contested decision, unless the decision is based on a written document signed by the debtor. The decision of the Supreme Court is final and cannot be further appealed.

Once the judgment comes into legal force, the creditor should initiate the enforcement procedure. The judgment may be presented for execution within 20 years. Within the framework of the enforcement of the 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 that is in the hands of third parties.

An alternative method of debt collection is to initiate bankruptcy proceedings against the debtor. In the Republic of Guinea-Bissau, this procedure is regulated by the Uniform Insolvency Law OHADA. A creditor may initiate bankruptcy proceedings if its claims are undisputed, payable and have a certain monetary value. If the debtor’s assets are insufficient to fully satisfy all creditors’ claims, the law provides for the possibility of annulling transactions concluded with the purpose of causing damage to creditors. Such transactions, concluded between the suspension of payments and the initiation of bankruptcy proceedings, include: transfer of property without compensation; agreements in which the debtor’s obligations significantly exceed those of the other party; early repayment of debts before their maturity; provision of security for existing obligations; as well as any transactions in which the counterparty knew about the debtor’s financial problems. Cancellation of such transactions allows the return of property or assets lost by the debtor, which increases the size of the liquidation estate to satisfy the claims of creditors and cover the costs associated with the bankruptcy procedure.

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

# DEBT COLLECTION AGENCY GUINEA-BISSAU

03.12.2024

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