Debt Collection

Maintaining a high level of cash flow is important for every business to succeed. As your business may, from time to time, supply goods or services on deferred payment bases, it is important to maintain ongoing monitoring for defaults in payment.

Collection of unpaid dues, or ‘debt collection‘ can prove challenging for business who would rather focus their resources on generating more income for the business than chase debtors for payment of outstanding balances. However, on some occasions, writing off bad debts is simply not option.

Gonzi & Associates, Advocates is a leading debt collection law firm, with vast experience in assisting clients to recover debts. Our team of expert lawyers have gained considerable experience in negotiating on behalf of our clients to achieve early settlement of disputes, or in default, successful recovery actions through judicial means.

Preliminarily, our Firm will attempt to establish communication lines with the debtors to explore early debt recovery options, thus avoiding further unnecessary expenses. To this end, our lawyers will draft legal letters and hold meetings with the debtor as necessary with a view to resolving the matter early on.

Sometimes debtors are unwilling to cooperate or reach a settlement agreement with creditors. In such scenario, our Firm will explore feasibility of issuing ‘Judicial Letters’ through the Court Registry. In some cases, issuing a judicial letter is simply necessary to protect the debtor from expiry (‘prescription‘) of any future action against the debtor.

Depending on the circumstances of the case, some types of judicial letter may be more effective than others. For instance, judicial letters issued in accordance with Article 166A of the Code of Organisation and Civil Procedure will, upon fulfillment of certain conditions, enable a creditor to enforce his claims against the debtor on the basis of an executive title without having to institute a Court case.

Debts that are not certain, liquid and due cannot be recovered without first obtaining a definitive judgement from a court of law. A court judgement is also required in the case of debts that are certain, liquid and due but which have been made subject to a lawful defense by the debtors.

Our team of lawyers at Gonzi & Associates, Advocates, are well suited to assist you with the preparation and submission of the relevant court applications for the institution of any action required for the purpose of debt collection.

The best way to protect yourself against any potential depletion of the debtor’s assets in the event of a positive judgement in your favour is to file for issuance of precautionary measures. The most common form of precuationary measures is the ‘garnishee order‘, an order by the Court to banks and financial institutions with which the debtor holds accounts to freeze an amount equal to the amount claimed and deposit such amount with the Court Registry for safekeeping.

The garnishee order is also available as an ‘executive measure’, that is, a measure to enforce an executive title obtained through a court judgement. Thus, in the event of a successful judgement, the amount so deposited may be claimed in full and final settlement of your debt claim.

Judgements lawfully obtained from competent courts in foreign jurisdictions may, subject  to the fulfillment of certain conditions, be enforced and executed in Malta. This is done through the recognition and enforcement of foreign judgements procedure contemplated in the Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta.

In some instances, pursuant to Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, the recognition procedure may be waived completely in respect of judgements obtained from courts of law in other European Union member states. Thus, in such case, the only procedure to be considered is the enforcement procedure with which a creditor may seek effective remedy against the debtor.