Debt collection in Moldova

The debt collection procedure in Moldova begins with an analysis of the debtor’s financial indicators, its 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 analysis forms the strategy that will be used to repay the debt. 

If the debtor does not have current court cases or outstanding court decisions on debt collection, and he is actively engaged in his activities, then it is advisable to proceed to 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 of installment payment of debt). 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 court.

Before initiating judicial recovery, you should pay attention to the statute of limitations. The general limitation period is 3 years. The legislation prohibits changing the specified period by agreement between the parties. Missing the statute of limitations does not prevent the creditor from going to court, but if the debtor applies to the court with an application to apply the consequences of missing the deadline, then the claim will be denied. The running of the statute of limitations may be interrupted by an act of voluntary performance or recognition in any other way, including partial fulfillment of obligations, payment of interest or penalties, a clarification for a deadline for payment, the provision of security, or the announcement of compensation.

Regarding international debt collection, the Republic of Moldova is a party to the 1974 UN Convention on the Limitation Period in the International Sale of Goods, and therefore if the foreign creditor is registered in a country that is also a party to this convention, the limitation period in this case will be 4 years.

Before going to court, an official pre-trial dispute resolution procedure should be carried out. Otherwise, the claim will be left without consideration on procedural grounds.

The legislation of Moldova provides for two types of debt collection through the court, by issuing a court order and through general claims proceedings.

The procedure for issuing a court order is applicable to claims for collection of receivables that are based on a written transaction or the claim arises from invoices that are due on the date of the filing. To carry out this procedure, you must submit a corresponding application to the court with evidence of the debt. Within five days after filing the application, the court issues a court order, without holding a trial, without calling the parties to give explanations and without drawing up a protocol. The court order is sent to the debtor, who, within ten days after receiving it, has the right to submit his objections to the court with evidence that confirms his position. Within five days after receiving objections, the court considers them and makes a decision to grant or refuse to cancel the court order. In case of refusal, the debtor has the right to appeal such a court decision within ten days through the cassation procedure. If the court takes into account the debtor’s objection, then the court order is subject to cancellation and the creditor should apply to the court in a general lawsuit procedure. If the debtor does not file an objection, agrees with the debt, or the court refuses to cancel the court order, the creditor will receive a second copy of the court order and can present it for execution.

The general procedure for litigation is carried out by filing a statement of claim in court. A specific period for consideration of the case in the court of first instance has not been established, but the law states that this period must be reasonable based on the complexity of the case, the behavior of the parties to the case, and the significance of the process. If one of the parties believes that there is a threat of violation of the reasonable time limit, she may apply to accelerate the consideration of the case. The decision of the court of first instance acquires the force of a final decision if within thirty days from the date of announcement of its operative part, unless it is appealed. In the operative part of the decision, the court establishes interest for delay, which the debtor is obliged to pay if he does not comply with the court decision within ninety days from the date the decision is declared final.

If an appeal is filed, it must be considered within a reasonable time. The decision of the appellate court is recognized as final from the moment of its adoption.

The decision of the court of appeal can be appealed to the Supreme Court of Justice within two months from the date of its adoption. Procedural legislation provides for the possibility of suspending the execution of a decision of a court of first or appellate instance, provided that the applicant pays a deposit to the account of the bailiff. The decision of the cassation court comes into force from the moment of its announcement.

After acquiring the decision as a final decision, it is necessary to obtain a writ of execution to initiate forced collection of the debt. A writ of execution may be presented for execution within three years from the moment the court decision acquires final status.

As part of enforcement proceedings, the bailiff has the right, at the request of the creditor, to charge interest, penalties and inflation for late execution until the date of actual repayment of the debt. The writ of execution must be executed within the time period specified therein. If no time period is specified, then within a reasonable time. The creditor’s claims based on the writ of execution can be satisfied by seizing the debtor’s accounts and writing off money from them; seizure of the debtor’s property with their subsequent sale or forced management of it; foreclosure of funds or property due to the debtor from third parties.

If the enforcement proceedings do not lead to positive results and if the debtor has signs of insolvency or excessive debt, the creditor may initiate bankruptcy proceedings for the debtor. The framework of this procedure provides for the possibility of bringing the owners or management of the debtor to subsidiary liability for the company’s debts, provided that the debtor’s insolvency is caused by the guilty actions of these persons.

An alternative option for influencing the debtor is to bring the controlling persons to criminal liability for failure to comply with a court decision in accordance with Art. 320 of the Criminal Code. This article provides for punishment in the form of a fine, unpaid work for the benefit of the company, deprivation of the right to engage in certain activities or hold certain positions and imprisonment.

If you have any questions or need support in regards to international debt collection in Moldova, 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 MOLDOVA

12.04.2024

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