Debt Collection in Myanmar

The debt collection process in Myanmar begins with an assessment of the debtor’s solvency, their business sector, business history, 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 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 has been 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 courts.

Before initiating judicial collection, it is worth paying attention to the limitation period. The limitation period for debt collection is 3 years. The limitation period is interrupted if the debtor acknowledges the debt obligation by written confirmation or partial payment. After the interruption, the limitation period begins to count anew.

The legislation of Myanmar (Burma) provides for judicial debt collection in the ordinary judicial procedure and in a simplified procedure.

The courts of first instance are the Town, District and High Courts. The Town Court has jurisdiction to hear cases involving debts up to 10,000,000 kyats, the District Court up to 500,000,000.00 kyats, and the High Court has unlimited jurisdiction.

The ordinary judicial procedure is by filing a statement of claim with the court, after which the court verifies whether the claim complies with the requirements of the law and, if so, registers the claim. After the claim is registered, the court issues a summons to appear and respond to the claim on the date specified in the summons. The summons is served on the defendant together with a copy of the statement of claim.

The defendant must, at or before the first hearing, state his defense to the claim in writing. In his defense, the defendant must specifically address each allegation of fact the truth of which he denies. If the defendant denies an allegation of fact, such denial must be to the point and without the use of evasive language. An allegation that is not expressly denied by the defendant is deemed to be admitted. If the defendant invokes several different grounds for defense based on separate and distinct facts, such facts shall be stated as separately and distinctly as possible.

If the defendant fails to provide his defense against the claim, the court may enter a judgment against the defendant if the court has no doubts about the validity of the claim. The same situation applies if the defendant fails to appear in court on the appointed day.

If both parties appear at the first hearing, the court interrogates the parties to determine whether they admit or deny the facts and statements contained in the parties’ written documents. The parties must also submit to the court all documents and evidence to which they intend to rely in support of their statements. At the first hearing, the court determines what essential issues of fact or law the parties disagree on, and then formulates the questions on which the correct decision of the case depends. The court then conducts the trial of the case in the context of examining evidence and documents that help resolve disagreements on contentious issues and determine the validity of the position of one or another party. Once all questions of fact and law are clear to the court, the court concludes the hearing and makes a decision. If the court finds that there is no disagreement between the parties regarding questions of fact or law, the court may make a decision immediately.

The simplified procedure applies to the collection of debts on bills of exchange and cheques. The procedure is similar to the general procedure, but is carried out in a shorter time frame.

The decision of the City and District Court may be appealed to the High Court within 15 days from the date of the contested decision. The decision of the High Court may be appealed to the Supreme Court of Myanmar within 90 days from the date of the contested decision. The decision of the Supreme Court is not subject to further appeal.

After the court decision comes into legal force, the creditor should initiate the enforcement procedure. The court decision may be presented for execution within 12 years from the date of entry into legal force of the decision. A foreign court decision may be presented for recognition and enforcement within 6 years from the date of entry into legal force of the decision. As part of the enforcement of a court decision, the creditor’s claims may be satisfied by seizing and writing off funds from the debtor’s accounts; seizure of the debtor’s movable and immovable property with subsequent sale; seizure and confiscation of securities; seizure and confiscation of company shares.

If the debtor is in a state of insolvency, it is advisable to use the procedure for liquidation of the debtor. According to the provisions of the Insolvency Law, the debtor is insolvent in the following cases: 1) if the amount of the debt is not less than 1,000,000 kyats and if the debtor has not paid the amount of the debt or has not settled the debt issue on terms satisfactory to the creditor within 21 days from the date of receipt of a written demand from the creditor; 2) the court decision on debt collection after compulsory execution was returned unsatisfied in whole or in part. If, during the liquidation of a company, it is discovered that the company’s activities were carried out with the intention of defrauding the company’s creditors, the court may find that any persons who knowingly participated in the conduct of business in such a manner must contribute to the company’s assets in an amount that the court deems appropriate to fully satisfy the creditor’s claims. In addition, as part of the liquidation procedure, if the court establishes fraudulent actions by the debtor’s management in relation to creditors or violations of the liquidation procedure, the court may imprison such persons. Such actions include, in particular: fraudulent seizure or concealment of part of the debtor’s property; failure to provide full information to the liquidator about the debtor’s property, including when and for what remuneration the debtor’s property was transferred to third parties. If the debtor is an individual who intentionally concealed or transferred his assets to third parties in order to avoid paying the debt to the creditor, the court may also cancel the specified transactions and bring the debtor to criminal liability. As a result of using the above provisions of the legislation, it is possible to increase the chances of satisfying the creditor’s claims in full.

If you have any questions or need support for international debt collection in Myanmar (Burma), our company is ready to provide its expert assistance for the effective resolution of your financial issue. Contact us to get additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY MYANMAR

15.10.2024

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