Debt Collection in the Central African Republic

The debt collection process in the Central African Republic 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 early recovery of the debt.

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.

The Central African Republic is a member of OHADA (Organization for the Harmonization of Business Law in Africa), which includes nine approved Uniform Legal Acts applicable to all member countries of the above-mentioned organization. Therefore, the procedures for judicial collection of debt, enforcement and bankruptcy are mainly regulated by the provisions of the relevant Uniform Acts.

Before initiating judicial collection, it is worth paying attention to the limitation period. According to the provisions of the general commercial law of OHADA, obligations arising from trade transactions between merchants or between merchants and non-merchants cease after five years. The consequences of the expiration of the limitation period are applied in the court of first instance and the appellate court only at the request of the debtor. The limitation period is interrupted by the recognition of the creditor’s claims by the debtor. After interruption, the limitation period begins to run anew. The limitation period may be shortened or extended by agreement of the parties. However, it cannot be shortened to less than one year or extended to more than ten years. The parties may also, by mutual agreement, supplement the list of reasons for suspending and interrupting the limitation period.

Judicial debt collection in the Central African Republic is carried out in the ordinary court procedure and in the order of issuing an order for payment.

The ordinary court procedure begins with the filing of a petition to summon the debtor to court. If the petition meets the procedural requirements, the court issues an order to summon the defendant at the appointed time. The order to summon and a copy of the petition are transferred to the bailiff for subsequent delivery to the defendant.

The parties must promptly communicate to each other the factual grounds on which they base their claims, the evidence they present, and the legal grounds they rely on, so that each party can organize its defense before the hearing.

On the appointed day, the parties may appear in person or through their representatives. If the debtor fails to appear, the court hears the case without his participation based on the available materials. If the parties appear, the court hears them and if the court understands all the circumstances of the case, it may make a decision at the same hearing.

If there is a dispute over the facts in the case, the court appoints investigative measures capable of proving the facts on which the resolution of the dispute depends. During the investigative measures, the court interrogates the parties and witnesses, requests evidence, verifies the authenticity of documents, appoints an expert examination or involves the appropriate specialists. After these actions have been carried out and the truth in the case has been established, the court hears the arguments of the parties and makes a final decision.

The procedure for issuing a payment order is regulated by the OHADA Debt Management Act and is used to collect debts arising from contracts, bills of exchange or checks. To initiate the procedure, the creditor must file an application for a payment order with the court, attaching documents proving the existence of the debt. If the court finds the application to be valid in whole or in part, it issues an order for the collection of the specified amount. If the court rejects the application in whole or in part, the decision cannot be appealed. In such a situation, the creditor can file a claim with the court under the general procedure.

A copy of the application and the payment order must be served on the debtor within three months, otherwise the order will become invalid. Upon receipt of these documents, the debtor must either pay the debt within 15 days or file an objection within the same period. If there is no objection, the payment order becomes an enforcement document. If the debtor files an objection, the court attempts to resolve the dispute between the parties. If an agreement is reached, a reconciliation act is drawn up, which is signed by both parties; one of the copies of the act shall be enforceable. If reconciliation is not reached, the court shall immediately consider the case and issue a decision on the collection of the debt, even in the absence of the debtor. Such a decision shall be equivalent to a decision made in an adversarial process and shall replace the original order for payment.

The decision of the court of first instance may be appealed to the court of appeal within two months from the date of the contested decision. The period for appealing decisions in uncontested cases is one month. The decision of the court of appeal may be appealed to the Court of Cassation of the Central African Republic within two months from the date of the contested decision. The decision of the Court of Cassation is final and may not be further appealed.

After the court decision comes into legal force, the creditor should initiate the enforcement procedure. As part of the enforcement of the 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 their subsequent sale; seizure and confiscation of securities, seizure and confiscation of the debtor’s property held by third parties.

An alternative method of debt collection is the initiation of bankruptcy proceedings against the debtor. In the Central African Republic, this procedure is regulated by the Uniform Insolvency Law OHADA. A creditor has the right to initiate bankruptcy if its claims are undisputed, liquid and payable. If the debtor’s assets are insufficient to fully satisfy the creditors’ claims, the law provides for the possibility of annulling transactions concluded with the aim of causing damage to creditors. Such transactions, concluded between the suspension of payments and the initiation of bankruptcy proceedings, include: gratuitous transfer of property; agreements with clearly unequal obligations of the parties; early repayment of debts whose maturity date has not yet arrived; provision of security for old debts; as well as transactions in which the other party knew about the financial insolvency of the debtor. The cancellation of such transactions allows the recovery of assets lost by the debtor, which increases the liquidation estate necessary to satisfy creditors’ claims and cover bankruptcy-related expenses.

If you have any questions or need support for international debt collection in the Central African Republic (CAR), our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us to receive additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY CENTRAL AFRICAN REPUBLIC

18.12.2024

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