Debt Collection in Jordan

The debt collection procedure in Jordan begins with an assessment of the debtor’s solvency, scope of activity, business history, 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 to be employed 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, 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 the fastest possible debt recovery.

The average time for informal out-of-court collection is up to 60 days (except in cases where a debt repayment installment plan is agreed upon). If this stage does not bring 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 court.

Before initiating judicial collection, it is worth paying attention to the limitation period. The limitation period for debt collection is 15 years. The consequences of missing the limitation period are applied in court only at the request of the debtor. The limitation period is interrupted if the debtor recognizes the creditor’s right explicitly or implicitly. After the interruption, the limitation period is calculated anew.

Jordanian legislation provides for judicial debt collection in ordinary court proceedings.

Ordinary court proceedings begin with the filing of a statement of claim, which is registered by the court after payment of the state fee. The defendant must submit a written response to the court registry within thirty days of receipt of the claim, enclosing documents substantiating his position. If the defendant is outside Jordan, the court may extend the period for an additional 15 days upon his request.

If the defendant fails to submit a written response to the statement of claim within the above time limits, the court shall set a hearing for the consideration of the claim and shall notify the plaintiff and the defendant of the date of this hearing in the prescribed manner. In this case, the defendant does not have the right to file a response to the statement of claim in any form.

If the defendant files a written response to the statement of claim, the plaintiff has the right, within ten days from the day following the receipt of the defensive response, to file a response to it together with a note containing his objections and comments on the defendant’s evidence. He also has the right to attach to his response the necessary evidence to refute the evidence of the opponent.

The defendant in his response, and the plaintiff in his response to the counter-response, cannot simply deny the opponent’s statements in a general form. They are required to give a clear and direct answer to all points in the opponent’s statement and to discuss each factual issue with which they disagree. The court has the right, in the event of an unclear answer, to oblige either party to clarify its statement in detail.

After the above-mentioned deadlines have expired, the court shall schedule a preliminary hearing within 7 days. During the preliminary hearing, the court shall discuss the subject of the dispute with the parties, examine documents, determine points of agreement and disagreement between the parties, and encourage the parties to settle the dispute amicably.

After the preliminary hearing has expired, the court shall set a date for the trial. During the trial, the court shall examine the evidence in the case and hear the explanations of the parties. Except in cases of extreme necessity, the court shall not adjourn the trial for more than fifteen days at a time or adjourn it more than once for the same reason. At the conclusion of the proceedings, the court shall hear the parties’ deliberations and render a decision at the same hearing or at a subsequent hearing, but not later than 30 days after the conclusion of the proceedings. 

The decision of the Magistrates’ Court and the Court of First Instance may be appealed to the Court of Appeal. The appeal period is ten days. If both parties agreed during the trial that the decision shall not be appealed to the Court of Appeal, then no appeal may be filed. The decision of the Court of Appeal may be appealed to the Court of Cassation of Jordan, provided that the value of the claim exceeds JD 10,000. The appeal period is thirty days. The decision of the Court of Cassation may not be further appealed.

After the judgment comes into legal force, the creditor must initiate enforcement proceedings. The judgment may be presented for enforcement within 15 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 and then selling them; seizing and confiscating securities; seizure and confiscation of company shares.

Bankruptcy proceedings are an additional means of collecting debts from companies and entrepreneurs. According to the Jordanian Commercial Law, a debtor is declared bankrupt if he stops paying commercial debts or maintains his financial stability solely through funds that are clearly obtained illegally. If the debtor’s assets are insufficient to fully satisfy the creditors’ claims, it is possible to cancel his transactions made with the aim of causing damage to creditors. The following acts may be considered invalid if they were performed by the debtor after the date of cessation of payments or within twenty days before that moment: 1) gratuitous acts and assignments, with the exception of small customary gifts; 2) payment of debts before their maturity, regardless of the form of such payment; 3) payment of monetary obligations payable not in money, but by bills of exchange, transfers and, in general, by any equivalent compensation; 4) securing a mortgage or pledge of the debtor’s property to secure a previously incurred debt; 5) transactions with a counterparty who knew about the suspension of payments by the debtor. The limitation period for cancellation of such transactions is eighteen months from the date of bankruptcy declaration. Cancellation of such transactions allows to return assets to the debtor and increase the liquidation estate to satisfy the claims of creditors and cover the costs of the bankruptcy procedure.

If you have any questions or need support on international debt collection in Jordan, 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 JORDAN

31.10.2024

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