Debt Collection in Jordan

The procedure for debt collection in Jordan should begin with a legal and practical assessment of the debtor, the debt documents and the real prospects of recovery inside Jordan. At this stage, it is important to identify the debtor’s exact legal status, registered address, commercial activity, available assets, bankable cash flow, current litigation, enforcement cases, possible insolvency indicators and the quality of the documents supporting the claim.

For corporate debtors, the assessment should also include the debtor’s company data, authorized signatories, registered capital, changes in management, branch information and other details available through the Companies Control Department where relevant. This helps determine whether the creditor should start with a documented out-of-court demand, prepare ordinary court proceedings, consider provisional protective measures, enforce an existing judgment or monitor the debtor for insolvency-related risks.

The out-of-court stage is focused on a structured payment demand and commercially realistic negotiations with the debtor. The creditor may seek immediate payment, an agreed payment schedule, return of goods, transfer of the debt to another liable party, set-off, replacement performance or another settlement solution that corresponds to the contract and the documents in the file.

Communication with the debtor usually begins with a written notice sent through traceable channels such as mail, email or other business communication methods previously used by the parties. For a Jordanian recovery strategy, the content of this notice is important: it should identify the debt, the legal basis of the claim, the amount due, the requested method of payment and the consequences of non-payment, while also preserving evidence for later court proceedings.

This stage may also help obtain a written acknowledgment of debt, a partial payment, a signed payment schedule or a documented refusal from the debtor. Such evidence can be important because acknowledgment of the creditor’s right may interrupt the running of the limitation period under Jordanian civil law. In practice, informal recovery is usually kept within a period of up to 60 days, unless the parties agree on a longer installment plan or another settlement mechanism. If the debtor avoids communication, disputes the debt without sufficient grounds, transfers assets or shows insolvency indicators, the creditor should prepare the appropriate court or enforcement route.

Before initiating judicial recovery, the creditor should assess the limitation period applicable to the specific debt. Under the Jordanian Civil Code, the general rule is that a claim is not heard against a denying debtor after 15 years, subject to special statutory rules. In commercial matters, the right to bring a claim is generally time-barred after 10 years unless a shorter period is provided. Certain claims may be subject to shorter periods, including periodic claims, professional fees, supply-related claims, negotiable instruments or cheque-related claims.

The limitation issue is especially important in cross-border debt recovery because the date of maturity, the type of obligation and the debtor’s conduct may affect the procedural strategy. Acknowledgment of the creditor’s right, whether express or implied, interrupts the running of the limitation period, and judicial demand or another judicial step taken by the creditor to assert the right may also interrupt it. After interruption, a new period begins to run according to the applicable rule.

Jordanian legislation provides for judicial debt collection mainly through ordinary court proceedings when the debt is disputed, the debtor does not pay voluntarily or the documents require judicial assessment.

Ordinary court proceedings begin with the filing of a statement of claim before the competent court. The claim may be submitted in paper or electronic form where applicable and should include the parties’ details, the facts of the claim, the legal basis, the amount sought and the creditor’s requests. The claimant must attach the supporting documents, a list of written evidence held by third parties, a list of witnesses and other evidence required at the filing stage. After payment of the court fee, the claim is registered and takes effect from the date of registration.

The defendant must submit a written answer to the court registry within 30 days from the day following service of the statement of claim. The answer should include the defendant’s address and contact details, supporting documents, written evidence held by third parties and the list of witnesses. This period becomes 60 days if the defendant is the Civil Attorney General, an official or public institution, or if the defendant resides outside Jordan. The president of the court or the delegated judge may grant one extension: 15 days for the ordinary 30-day period or 30 days for the 60-day period, if the request is filed before expiry of the original period and justified reasons are accepted.

If the defendant does not submit a written answer and defensive evidence within the applicable period, the court sets a hearing and notifies the parties in the prescribed manner. In that situation, the defendant loses the right to file an answer to the claim and is generally limited to submitting a memorandum of defenses and objections to the claimant’s evidence, discussing that evidence and presenting final arguments, without prejudice to the right to direct a decisive oath where available.

If the defendant files a written answer, the plaintiff may file a reply within 10 days from the day following receipt of the answer. The reply may include objections to the defendant’s evidence and the evidence needed to rebut it. The defendant may then submit objections to rebuttal evidence within 10 days from the day following service of that evidence.

The parties may not rely on a general denial of the opponent’s statements. The written answer and the reply must respond clearly and directly to the factual issues raised by the other party, and the court may require clarification if a response is unclear or incomplete.

After the exchange of pleadings and evidence, the case may pass through Civil Case Management. The case management judge may schedule a session within seven days after the expiry of the periods for pleadings, discuss the subject of the dispute with the parties, verify documents, identify points of agreement and disagreement, request documents held by the other party or third parties and encourage settlement. The purpose of this stage is to prepare the case for trial and narrow the issues before the court.

During the trial, the court examines the evidence and hears the parties’ explanations. Except in cases of serious necessity, adjournments should not be used in a way that delays the proceedings without justification. After the court closes the trial, it pronounces judgment in the same session or in a later session scheduled for that purpose within a maximum period of 30 days.

Judgments issued by Jordanian courts may be appealed according to the applicable procedural rules and the type of decision. Final judgments are generally appealed within 30 days unless a special rule provides otherwise, while certain procedural decisions are subject to a 10-day appeal period. If the parties validly agree during the proceedings that the first-instance judgment will not be appealed, the right to appeal may be limited according to the procedural rules.

A judgment of the Court of Appeal may be challenged before the Court of Cassation of Jordan in claims whose value exceeds JD 20,000 within 30 days from the relevant procedural starting point. Other appellate judgments may be challenged before the Court of Cassation only with permission from the president of the Court of Cassation or the delegated judge. The decision of the Court of Cassation is final and cannot be challenged by a further ordinary appeal.

In cross-border cases, recognition and enforcement of foreign judgments may be an independent route where the creditor already has a foreign civil judgment or an arbitral award that is enforceable as a court decision in the country where it was issued. Under Jordanian rules, a foreign judgment may be enforced in the Hashemite Kingdom of Jordan by filing a lawsuit for enforcement before the Court of First Instance. The Jordanian court does not conduct a full re-hearing of the merits, but it examines statutory enforcement conditions, including finality of the foreign decision, jurisdiction of the foreign court, proper notice to the debtor, absence of fraud and compatibility with Jordanian public policy.

After a domestic judgment becomes enforceable, or after a foreign judgment is recognized for enforcement in Jordan, the creditor proceeds through the Execution Department. A judgment may be presented for enforcement within 15 years. Enforcement may include attachment and collection of funds from bank accounts, attachment and sale of movable and immovable property, enforcement against securities, shares and other assets legally subject to execution.

Modern Jordanian enforcement rules also allow important electronic procedures, including registration of enforcement claims, payment of fees, submission of enforcement requests, notifications and correspondence by electronic means. The creditor should also take into account the 2022 amendments to the Execution Law. These amendments regulate debtor imprisonment more restrictively, provide limits on imprisonment periods and preserve other precautionary measures, including travel bans, in situations where such measures are legally available. For practical recovery, the main focus should be on enforceable assets, active execution requests, attachment measures and monitoring whether the debtor is moving into insolvency.

Insolvency may become relevant if the debtor is a company, entrepreneur or another person carrying out economic activity and individual enforcement is unlikely to produce recovery. Jordan’s Insolvency Law No. 21 of 2018 applies to persons carrying out economic activity, including legal entities, individual traders and licensed professionals, with specific exclusions such as banks and insurance companies. The law recognizes actual insolvency and imminent insolvency. A creditor may request declaration of insolvency only in actual insolvency, while the debtor may rely on actual or imminent insolvency.

For a creditor, insolvency is important because it changes the recovery route. The procedure may pass through a preliminary stage, reorganization or liquidation. After insolvency is declared, new individual claims against the debtor are generally not heard through ordinary litigation, and enforcement against the debtor’s assets is stopped. Creditors must submit their claims through the insolvency procedure, and the insolvency estate is administered under court supervision.

A creditor’s insolvency petition must be supported by evidence of a debt that is determined in amount, due and not conditional. Actual insolvency may be evidenced, among other things, by unsuccessful enforcement, attachment of all debtor assets, asset flight, a sale at a gross undervalue, disappearance of the debtor or closure of the debtor’s main centre of interests. These factors make insolvency analysis particularly important where the debtor company continues to exist formally but enforcement does not lead to payment.

Transactions affecting the insolvency estate should also be assessed. Under the modern insolvency framework, acts made contrary to the debtor’s powers after declaration of insolvency may be declared ineffective, and if new assets or transactions subject to ineffectiveness procedures are discovered after the closing of insolvency, a creditor may request reopening of the procedure within the statutory framework. In addition, where Commercial Law bankruptcy rules remain applicable to legacy or specific bankruptcy situations, creditor analysis may still include gratuitous transfers, payment of debts before maturity, unusual forms of payment, creation of security for pre-existing debts and transactions with persons who knew about the debtor’s cessation of payments, including the eighteen-month period for cancellation claims from the date of bankruptcy declaration. If such transactions or actions are annulled, the affected assets may be returned to the insolvency or liquidation estate, which can increase the pool of assets available for creditors and improve the prospects of a fuller satisfaction of creditor claims.

The conduct of management and related persons may also affect recovery. Persons managing a legal entity must file for insolvency within two months from the date they actually or constructively know that the debtor is insolvent, and breach of this duty may create personal liability for damage. The Insolvency Law also provides penalties for concealment of assets, false lists of creditors, omission of debts or creditors, transactions intended to give improper advantages to selected creditors and other conduct that harms the insolvency estate.

If you need support with debt collection in Jordan, Grandliga can assist at every stage of the recovery process: debtor assessment, review of contracts and supporting documents, preparation of a written demand, settlement negotiations, limitation period analysis, court strategy, provisional protective measures, recognition and enforcement of foreign judgments, enforcement through the Execution Department and insolvency-related recovery. The appropriate route depends on the debtor’s legal status, available assets, documents, procedural deadlines and the practical prospects of enforcement in Jordan.

# DEBT COLLECTION AGENCY JORDAN

31.10.2024

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