CALL US +357 22 510165 Home About Us Areas Of Practice News & Publications Careers Contact Us Debt Collection in Cyprus Home › Areas of Practice › Debt Collection in Cyprus Areas of Practice Debt Recovery and Debt Collection in Cyprus We provide debt recovery and bad debt recovery solutions to our clients for the recovery of their money and assets. Our experienced team of professionals can assist with the recovery of the debt due, the interest as well as damages and expenses incurred. How someone approaches debt collection in Cyprus is extremely important. We know that when collecting your debts, time is of the essence. We also know that consider able resources may be wasted by the creditor to follow up on otherwise irrecoverable debts due and at times, the creditor’s only choice is to treat the debts as “bad”. We also understand that the Coronavirus may have created a back log of debts, some of which are genuine cases of inability to pay, whilst some other cases relate to strategic behaviour by the Debtors not to pay their debts. Our debt collection procedure aims exactly at combating strategic responses of debtors in not paying what they owe whilst in cases where the debtor is genuinely unable to pay, we offer a flexible approach based on the wishes of the client. Our aim is to provide a speedy and cost effective debt collection service to our clients. Our team of lawyers in Cyprus follow all the conventional collection procedures and will recommend the most suitable collection strategy, having regard to the client’s best interests. PAGE CONTENT Our Services and Key People How we approach debt collection in Cyprus Locating the Debtor Communicating with Debtor Negotiating with the Debtor Sending a letter of demand to the Debtor Filing a Lawsuit against the Debtor Enforcing a Judgement against the Debtor Frequently Asked Questions Procedure for Debt Collection in Cyprus In Cyprus, debt collection in relation to commercial transactions provides the creditor with automatic entitlements. This is based on Directive 2011/7/EU on combating late payment in commercial transactions which provides for the following: Enterprises have to pay all invoices within 60 days, unless agreed otherwise. The creditor is allowed interest for the late payment of invoices The creditor is allowed a minimum of €40 as compensation for recovery costs. There is a late payment interest rate of 8% above the European Central Bank’s reference rate. Furthermore the creditor is also allowed to recover the following: Expenses paid to their lawyer for sending a letter of demand. Costs of filing a lawsuit (in case that is successful) When the creditor is dealing with a lot of debtors, we use a specialist software designed to keep track of the Cyprus debt collection process. If the creditor so wishes, our specialist software can be connected with the database of the creditor so that the creditor is at all times informed about the process and at what stage (of the stages mentioned below) the debt collecting process is at. In accordance with case law, any amounts paid to the lawyers as part of the debt collection in Cyprus (provided they are reasonable) can be recovered as damages from the debtor in addition to any of the amounts due. 3 Our Cyprus debt collection process includes initial soft communication with the debtor This method is used to establish contact with the debtor. We find the approach of softly communicating with a debtor first to be very effective for debt collection in Cyprus. There are a lot of instances where debtors, as soon as they understand that their case has been assigned to debt collectors in Cyprus, especially if these are lawyers, will consider that the matter must be settled. This is because of the ensuing legal proceedings which may take place which act as a disincentive for them to stall the debt collection process more. Soft communication will include an initial call to the debtor in order to assess his willingness to settle the case. Please note that we follow instructions from our clients prior to settling any case. 4 Negotiating with the Debtor is part of our strategy for Debt Collection in Cyprus A part of our team of lawyers in Cyprus are accredited mediators who experience in mediation proceedings, we have the know-how of what it takes to be a negotiator. We use these skills to enhance our Cyprus debt collection procedure and provide the optimum outcome for the client. In case all efforts to conclude the debt collection in Cyprus through negotiation do not bring the results we will then proceed with the next step which is to send a letter of demand on behalf of our clients. 6 Filing a lawsuit against the Debtor – Steps Filing a lawsuit against the debtor is the final step in our Cyprus debt collection procedure prior to initiating execution of the judgement for the amounts due. A lawsuit will be prepared by our team of lawyers in Cyprus who will then request the client to review it. The Statement of Claim will include all amounts due as well as the costs paid by the client for the debt collection procedure Filing of the Lawsuit The lawsuit is filed in the relevant Registrar of a Cyprus District Court. Serving the Lawsuit The lawsuit is then served on the debtor. Filing an Appearance The debtor has 10 days to file an appearance. There are many cases during this part of the debt collection process in Cyprus that the debtor will not file an appearance. In such a case we can apply for a judgement for failure of the debtor to file an appearance. Usually judgement is issued within 2-3 months from the date that the lawsuit is filed. Filing a Defence In case the debtor files an appearance, then he will also have to file a defence to the claim. Hearing After several other procedural steps, a date is set for a hearing where both parties present their case through their witnesses. Issuance of Judgement A judgement is issued by the court. 7 Enforcement Enforcement can be used for up to 10 years after a judgement has been issued. The court enforcement procedures which our team of Cyprus lawyers will carry out on behalf of the creditor are: Garnishee proceedings These proceedings aim at finding out whether there is money in a bank account (or whether there are amounts due to the debtor by third parties) and requesting that those amount are paid directly to the Creditor to extinguish the debt. Writ of Movables/Immovables This step relates to the attachment of the judgement to movables or immovable property and requesting their sale. Bankruptcy These aim at causing the debtor to become bankrupt. This step has considerable negative effects on the debtor including the prohibition to own checks or become director in companies. Application to examine the financial situation of the Debtor Applying to the court and requesting the examination of the debtor’s financial situation and requiring the debtor to pay to the creditor an installment every month. Key People Evripides Hadjinestoros Partner Corporate and Commercial Transactions Debt Collection Trusts, Wills and Probate Banking and Finance Law Employment Law eh@dhadjinestoros.com (+357)22510165 Evripides is a partner at D. Hadjinestoros & Co LLC. After completing the LLB Law degree at Queen Mary University in London in 2009, he then completed a post-graduate diploma in Company Law LLM, at University College London. He graduated with Distinction. In 2016, Evripides published the book «The Law on the Sale of Goods and Consumer Protection in Cyprus», which was published by Nomiki Vivliothiki. He is a lecturer in commercial law at the European University Cyprus. He is also an accredited Mediator, Mediator Trainer and founder of the Cyprus Consumer Center for ADR Anastasios Anastasiou Lawyer Insurance Law Debt Collection Data Protection Commercial Law Employment Law aanastasiou@dhadjinestoros.com (+357)22510165 Anastasios specialises in corporate law matters, insurance law and debt collection. In addition he has vast knowledge in e-money and payment services legislation. He is a Lawyer an accredited mediator and a U.K. University graduate and holder of an LL.M from the University of Edinburgh. Anastasis has taught at the European University Cyprus and is a managing director of a law firm. Frequently Asked Questions relating to Debt Collection in Cyprus What are the stages of Debt Collection in Cyprus? What are the stages of a Legal Action in Cyprus? What are the amounts recoverable in Cyprus through the debt collection process? What is the chance of recovering amounts owed to me through the Debt Collection process in Cyprus? For a free, confidential consultation on Cyprus debt collection, you can contact us by phone, email or through the online form: T: (+357) 22510165 | F: (+357) 22318214 | E: office@dhadjinestoros.com By Clicking send you accept to the processing of the data you submit in accordance with the terms of our Privacy Policy. Copyright © 2020 D. Hadjinestoros & Co LLC. All Rights Reserved