Debt collection in Zimbabwe

The debt collection process in Zimbabwe begins with an assessment of the debtor’s solvency, their line of business, the history of the business, the availability of documentary evidence of the debt, ongoing court cases and enforcement proceedings, and the ability to dispute the debt. This assessment determines the strategy that will be used on the client’s behalf 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 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 messaging. This process involves intensive communication with the debtor in order to apply constant pressure. The main objective is to establish contact with key decision makers to achieve the fastest possible 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 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. For debts based on notarial contracts and bills of exchange, the limitation period is 6 years. The limitation period is interrupted if the debtor explicitly or tacitly acknowledges the debt. After the interruption, the limitation period begins to count anew.

Judicial debt collection in Zimbabwe is carried out in the ordinary and simplified judicial procedure.

An ordinary court procedure is commenced by issuing a summons, whereupon the registrar of the court, if the summons complies with the procedural requirements, registers it and issues a preliminary order for the recovery of the debt. The summons with the preliminary order and documents evidencing the debt are then served on the defendant.

After receiving these documents, the defendant has 10 days to appear in court and admit or deny liability.If the defendant fails to appear within the allotted time, or has filed a notice of defense but is estopped by failure to file an objection, the plaintiff may, without notice to the defendant, file an application to the court in written proceedings for a decision. On the basis of such an application, the judge may issue a decision that complies with the plaintiff’s rights under the summons or declaration.

If the defendant registers his appearance, he must file his objection to the plaintiff’s claims within 10 days. In turn, the plaintiff must file a reply to the defendant’s objection within 12 days of service of the objection. Thereafter, the defendant must file his reply to the plaintiff’s answer within 12 days.

If the defendant has appeared in court to defend himself, the plaintiff may, at any time before the pre-trial conference, apply to the court for summary judgment on the application contained in the summons. The application must be accompanied by an affidavit, which must contain a supporting statement of the facts supporting the claim and an allegation that the defendant does not have a bona fide defence and that the filing of an intention to defend is made solely for the purpose of delaying the proceedings. At the hearing of the application, the defendant may: (a) provide the plaintiff with security satisfactory to the registrar for any possible relief, including costs; (b) satisfy the judge by affidavit or oral evidence that he has a bona fide defence to the case. If the defendant does not provide security or does not convince the judge, the judge may issue a summary judgment in favor of the plaintiff. Otherwise, the case will continue to be heard in the ordinary manner.

Then the court, after the exchange of procedural documents, schedules a case management conference, during which the parties and attorneys meet to discuss the nature and basis of their claims and objections, and the possibilities for a speedy settlement of the claim.

After the case management conference is concluded, the judge sets the case for trial. During the trial, the court will decide issues of law and fact by examining evidence and examining witnesses. If the defendant is not present at the trial, the plaintiff may present evidence to the extent that the burden of proof is on him. The judgment will be made in proportion to the evidence presented by the plaintiff. Once all the facts of the case have been established, the court will hold pleadings between the parties and make a decision.

A decision of the Magistrates’ Court may be appealed to the High Court within 21 days of the date of the decision. A decision of the High Court may be appealed to the Supreme Court of Zimbabwe within 15 days of the date of the decision. The decision of the Supreme Court is final and cannot be appealed further.

Once the judgment has become final, the creditor must initiate enforcement proceedings. The judgment may be brought for enforcement for 30 years. In the context 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; seizing the movable and immovable property of the debtor with their subsequent sale; seizing and confiscating securities; seizing shares and stakes in companies; seizing and imprisoning the debtor.

An alternative option for debt collection is the procedure for liquidating the debtor. This procedure can be implemented if the debtor is unable to pay his debts, the payment period for which has come. In this case, the debtor is considered to be such that he cannot pay his debts in the following cases: 1) the debtor, within 21 calendar days, failed to fulfill the legal demand of the creditor to repay the debt or did not offer the creditor other reasonable satisfaction; or 2) it follows from the report of the official responsible for the execution of the court decision in relation to the debtor that the decision was not executed after its legal execution. The creditor has the right to initiate the liquidation procedure of the debtor if the following conditions are met: 1) the amount of the debt is not less than 200 US dollars; or 2) the company rescue procedure was not effective (if the debtor is a company).

As part of the bankruptcy procedure, if the debtor’s assets are insufficient to fully satisfy the creditors’ claims, it is possible to cancel the debtor’s transactions made with the intent to harm the creditors. Such transactions include, in particular: 1) any disposal of property without valuable consideration; 2) any transaction in which the debtor’s counterparty knew that the debtor was in a state of bankruptcy; 3) giving preference to one creditor over others. As a result of the cancellation of the above actions and transactions, it is possible to return back to the debtor what he lost from such transactions and, due to this, increase the liquidation estate to satisfy the claims of creditors in full.

If you have any questions or need support on international debt collection in Zimbabwe, our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us for more information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY ZIMBABWE

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