Debt collection in Mozambique

The debt collection process in Mozambique 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, ongoing 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 ongoing 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 rapid debt collection.

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.

Before initiating judicial collection, it is worth paying attention to the limitation period. The general limitation period is 20 years. The limitation period for debt collection arising from commercial obligations and contracts expires within five years. The parties have no right to change these terms by their agreement. 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 acknowledges the debt. After the interruption, the limitation period begins to count anew.

Judicial debt collection in Mozambique is carried out in the usual manner.

An usual court proceeding begins with the filing of a claim with the court. If the claim meets the established procedural requirements, the court registers the claim in the court registry and issues a summons to appear before the parties.

After receiving the summons, the defendant has 20 days to file a defense to the claim. If the defendant files a defense, the creditor has 10 days to respond.

On the appointed day, the parties must appear in person or through their representatives. At the first hearing, the court must ascertain from each party or its attorney whether it admits or denies the allegations of fact contained in the claim or defense (if any) of the opposing party that are not directly or indirectly admitted or denied by the party against whom they are made, and the court must record such admissions and denials.

If the court finds that the parties have no disagreement on issues of fact and law, it may proceed to the consideration of the case on the merits and make a decision at the same hearing. If there are disagreements, the court proceeds to formulate and register the issues on which the correct decision of the case depends. If the evidence presented is insufficient to resolve the disputed issues, the court appoints an additional hearing to present additional evidence. After considering the additional evidence, the court holds a debate between the parties and makes a decision.

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 Mozambique. The period for filing an appeal is twenty days from the date of the contested decision.

After the judgment comes into legal force, the creditor must initiate the enforcement procedure. The judgment may be presented for enforcement 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 the harvest.

An alternative option for collecting a debt from a company or entrepreneur is the bankruptcy procedure of the debtor. Bankruptcy of the debtor is declared if he: 1) fails to pay the obligation expressed in the writ of execution on time without justification; 2) commits one of the following actions, except in cases where these actions are part of the judicial recovery plan: a) hastily liquidates his assets or uses destructive or fraudulent methods to make payments; b) makes or attempts to make a transaction with the purpose of deferring payments or defrauding creditors by simulating a transaction or alienating part or all of its assets to third parties; c) provides or strengthens a guarantee to a creditor for a previously incurred debt, without leaving sufficient available assets to cover the debt; d) leaves without leaving a legal representative and with sufficient funds to pay the debts, leaves the enterprise or attempts to hide from its address, the location of its headquarters; d) fails to fulfill its obligations within the time limit set in the judicial recovery plan.

As part of the bankruptcy procedure, if the debtor’s assets are insufficient to fully satisfy the claims of creditors, it is possible to cancel the debtor’s actions committed with the intent to cause damage to creditors. Such actions should include, in particular: 1) payment of a debt subject to payment and requiring execution, made within the specified time limit in any way not provided for by the agreement; 2) establishment of a pledge for previously incurred debts; 3) performing actions free of charge within 2 years before declaring bankruptcy; 4) renunciation of inheritance or will, performed within 2 years before declaring bankruptcy; 5) payment of unfulfilled obligations; 6) sale of an enterprise without the express consent or full payment of the claims of all creditors, if the debtor does not have enough property to pay off the debts. As a result of the cancellation of the above actions, it is possible to return back to the debtor what he lost from such actions and, due to this, increase the liquidation estate to satisfy the claims of creditors and cover the costs of implementing the bankruptcy procedure.

If you have any questions or need support on international debt collection in Mozambique, 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 MOZAMBIQUE

06.01.2025

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