Debt collection in North Macedonia

Debt collection procedure in Macedonia 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). The Financial Discipline Law provides for a fine of 10,000 euros in denar equivalent for failure to fulfill a monetary obligation within 60 days of the occurrence of such obligation. Therefore, the provisions of this law encourage the debtor to resolve the financial issue within the above period. 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 legal action, you should pay attention to the statute of limitations. The general limitation period is 5 years. But for mutual claims of the parties from contracts for the sale of goods or the provision of services, the statute of limitations expires after three years. 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 legislation prohibits changing the specified period by agreement between the parties.

The legislation of North Macedonia provides for three options for debt collection through the court, by issuing a payment order, by implementing the general claims procedure and the small claims procedure.

The general claim procedure is carried out by filing a statement of claim in court, after which the court prepares for the main hearing and, within 8 days, serves the claim on the defendant with an offer to respond to the claim within the prescribed period but not less than 15 and not more than 30 days from the date of filing claim in court. Upon expiration of this period, the court sets a date for a preliminary hearing within the 50-day period. After the preliminary hearing, the court sets a date for the main hearing within up to 60 days (for complex cases up to 90 days). As a result of the consideration of the case, the court makes a decision (sentence), which comes into force after 15 days from the date of delivery of the transcript of the verdict to the party, provided that it is not appealed on appeal (in bill, check and commercial disputes this period is eight days).

*In commercial disputes regarding a monetary claim, the value of which does not exceed 1,000,000 denars, the parties are obliged to try to resolve the dispute through mediation before filing a claim. When filing a claim, the plaintiff must provide written evidence issued by the mediator that the attempt to resolve the dispute through mediation was unsuccessful. Otherwise, the court will reject the claim to which the specified evidence is not attached.

If the verdict is appealed on appeal, the case is considered in the court of second instance in a court session with the invitation of the parties. The failure of the parties to appear does not prevent the consideration of the appeal. The court of second instance makes a decision on the appeal no later than three months, and in more complex cases – within six months from the date the case was accepted for proceedings. The appellate court may not modify the judgment to the detriment of the appellant unless such party objects.

The decision of the court of appeal is final, but can be appealed to the Supreme Court of the Republic of Macedonia within 30 days from the date of delivery to the party of the protocol of the decision of the court of second instance. As a rule, an application for review of a decision of the second instance cannot be filed if the disputed amount does not exceed 1,000,000 denars (for commercial disputes 1,500,000 denars). Filing an application for review does not suspend the execution of the decision being appealed. The Supreme Court reviews the appealed decision within eight months from the date it accepted the case. The decision of the court of cassation is final and is not subject to further appeal.

The procedure for issuing a judicial payment order («Судски платен налог») is applicable for monetary claims of the creditor based on reliable documents. According to the provisions of procedural law, reliable documents include: official documents; bills and checks with protest and return receipts, if they are necessary to substantiate the claim; invoices; documents that, according to special rules, have the meaning of public documents. Once a claim is filed, the court will issue a court order without a hearing. In the payment order, the court indicates that the defendant is obliged to fulfill the claim within eight days, and in bill and check disputes – within three days after receiving the payment order, along with the costs assessed by the court, or within the same period to file objections to the court’s payment order. If the defendant does not raise objections within the specified period, the payment order acquires the force of a final decision. If the debtor raises an objection within the specified period, then the court, depending on the circumstances of the case, schedules a preliminary or main hearing to consider the validity of the objection and make a decision to uphold the payment order or cancel it. The legislation establishes three months for the implementation of this procedure. Also, in this category of cases, in order to appeal the decision of the court of first instance, the court of second instance is obliged to make a decision within thirty days.

The small claims procedure applies to claims not exceeding 600,000 denars. The procedure is carried out similarly to the general procedure for claim proceedings only in a shorter period of time and without a preliminary hearing. The decision on the case is announced immediately after the completion of the main hearing. A verdict or resolution resolving a dispute in the procedure for small sum disputes can be appealed only in the event of a significant violation of the provisions of the civil procedure, due to an erroneous or incompletely established factual state and due to incorrect application of substantive law. The period of filing appeal is eight days. Review of the final decision of the court of second instance is not permitted.

If, after the court decision enters into force, the debtor voluntarily does not comply with the court decision, a demand should be prepared and presented with the original document of execution to the executor to open the enforcement procedure. If the amount of the claim exceeds 10,000 euros, then such demand must be drawn up by a lawyer and contain the seal and signature of the lawyer, except cases where the creditor of the execution is the Republic of Macedonia, a bank, a savings bank, a finance company, a financial leasing provider or an insurance company. A court decision can be enforced within 10 years. If the enforcement document determines the collection of interest from the debtor, they are calculated and collected until the day the funds are deposited into the special account of the executor.

Article 27 of the Law on Enforcement establishes that transactions made before the execution of an executive document, which are necessary for the execution of the creditor’s claims or which put some creditors in a more advantageous position, or which are made only to prevent execution will not have legal significance in the execution of the executive order. document. Such transactions are considered void if they are made within six months before the adoption of the executive document. The invalidity of these transactions is determined by the final decision made in civil proceedings.

The creditor’s demands at the stage of forced collection can be satisfied by seizing the debtor’s accounts and writing off money from them; seizure of movable and immovable property of the debtor with their subsequent sale; seizure and sale of securities and shares of trading companies; conversion of any property rights into money, transfer of funds held by the holder of the payment transaction.

If the debtor has signs of insolvency (a debtor who is unable to pay the amount due within 45 days is considered insolvent), it is worth considering an alternative option for collecting the debt by initiating bankruptcy proceedings for the debtor. The Bankruptcy Law obliges persons and bodies authorized to manage, represent and supervise a legal entity to make a proposal to open a bankruptcy procedure no later than the twenty-first day from the date the grounds for opening a bankruptcy case arise. In case of failure to fulfill this obligation, these persons and bodies bear personal and joint liability for damage caused by creditors of the debtor legal entity.

When opening bankruptcy proceedings, the court checks the availability and cost of the liquidation estate, and if it is not enough to cover the bankruptcy procedure, then the proceedings are closed unless the creditor agrees to finance these costs at his own expense.

As part of this procedure, at the request of the bankruptcy trustee for the participants of the debtor company, personal unlimited liability of these participants for the obligations of their debtor company may be established. It is also allowed to cancel transactions that resulted in damage to creditors, for example, transactions made ten years before the opening of bankruptcy proceedings with persons who knew that such transactions would cause damage to the debtor’s creditors, or gratuitous transactions (or transactions with insignificant payment) made four years before the opening of bankruptcy proceedings. As a result of the cancellation of such transactions, it is possible to return back to the debtor what he lost from such transactions and, due to them, increase the liquidation estate.

If you have any questions or need support with international debt collection in Macedonia, 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 NORTH MACEDONIA

12.04.2024

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