In Cyprus, debt collection is governed by the Cyprus Civil Procedure Law and the debt collection practices. Debt collection can be a complex and time-consuming process, but there are several options available for creditors to recover outstanding debts.

The first step in the debt collection process is to send a formal demand letter to the debtor, requesting payment of the outstanding debt. If the debtor does not respond or does not pay, the creditor may need to take legal action.

Legal action can be taken by filing a lawsuit against the debtor and obtaining a judgement against the debtor. Once a judgement is obtained, the creditor can use various means of execution which will be described below in order to levy execution of the judgement.

Alternatively, creditors can hire a debt collection agency to handle the debt collection process on their behalf. Debt collection agencies can send demand letters, negotiate payment plans, and take legal action if necessary.

It is important to note that there are regulations in place to protect debtors from abusive debt collection practices. Debt collectors in Cyprus are required to follow the Code of Conduct for debt collection, which prohibits harassment, threats, and other aggressive tactics.

If you are a creditor seeking to recover an outstanding debt in Cyprus, it is recommended to consult with a lawyer with experience in Cyprus debt collection laws and procedures.

What actions can I take in Cyprus court for debt collection?

If you are a creditor seeking to collect a debt in court, there are several legal actions you can take:

• File a lawsuit: You can file a lawsuit against the debtor to collect the outstanding debt. This involves submitting a legal action to the court that explains the nature of the debt, the amount owed, and the legal basis for the claim.
• Obtaining a judgement and means of execution: If the court finds in your favour, it will issue a judgement against the debtor, for the amount of the debt. This judgement can be enforced or executed through various legal means, such as by issuing a writ of movables, or through an order for payment of the debt by instalments, or through a writ of attachment, through filing a legal charge on the immovable property of the debtor. Bankruptcy proceedings can also be available although strictly speaking there are not considered to be a form of execution, which could result in the liquidation of their assets to pay the debt. Also petitions to winding up a company can be also used (again not considered to be a form of execution).
• Issue a writ of execution: A writ of execution or a writ of movables involves seizing the debtor’s movable property such as cars, furniture etc. and selling them in an auction.
• Registering a charge on land: The creditor may register his judgement at the Land Registry, on the debtor’s land as a security for payment of his debt. This is a registered charge on the debtor’s immovable property, and this means that if the debtor sells his property, the proceeds of the sale (or part of it, depending to the debt) will be used to satisfy the debt. After a year of registering the charge has elapsed the creditor is allowed provided certain procedure is followed to petition for a sale of the land so registered.
• Writ of attachment: This is issued against a third party that has in his custody of control any money, security for money, goods or other movable property which belongs to the debtor or the debtor is beneficially interested in it, then the third party appears before the court and is examined in relation to such property in his hands. If such property is found then it will be used for the satisfaction of the judgement debt. Usually this procedure is used for bank accounts of the judgement debtor and if the account is found to be in credit then an order for payment of the judgement debt is issued.
• An order for payment of the judgement debt by instalments: In this procedure the judgement debtor is examined for his ability to pay the debt by instalments and an order might be issued for payment of the debt through his wages by ordering the employer to pay the sum ordered to the creditor directly out of the debtor’s wages.
• Apply for a garnishee order: A garnishee order allows you to collect the debt directly from the debtor’s wages or bank account

What if I already have a judgement against a Cyprus debtor, from a foreign court or from a foreign arbitration award?

If you already have a judgement against a Cyprus debtor from a foreign court or from a foreign arbitration centre, you may be able to enforce the judgement in Cyprus.

Under the EU Regulation on Jurisdiction and the Recognition and Enforcement of Judgements in Civil and Commercial Matters (also known as the Brussels Regulation), a judgement obtained in one EU member state can be enforced in another EU member state without the need for further legal proceedings. This means that if you have a judgement against a Cyprus debtor from another EU member state, you can apply to have the judgement recognized and enforced in Cyprus.

If the judgement was obtained from a non-EU country, you will need to go through the process of having the judgement recognized in Cyprus. This typically involves submitting an application to the Cyprus courts and providing evidence that the judgement meets the legal requirements for recognition and enforcement under Cyprus law.

Once the judgement has been recognized in Cyprus, you can then take legal action to enforce the judgement. This may involve obtaining a writ of execution, a charging order, or other legal means of collecting the debt.

It is important to note that the process of enforcing a foreign judgement in Cyprus can be complex and time-consuming, and it is recommended to seek the advice of one of AGP Law lawyers with experience in cross-border debt collection to ensure that you are following the appropriate legal procedures.

In Cyprus, the recognition and enforcement of non-EU judgements and awards are governed by the Civil Procedure Law, as well as by international treaties and conventions to which Cyprus is a party.

Under the Civil Procedure Law, a foreign judgement or award may be recognized and enforced in Cyprus if certain conditions are met. These conditions include:

• The foreign judgement or award must be final and conclusive: This means that the judgement or award must be a final decision that is no longer subject to appeal or review in the country in which it was issued.
• The foreign judgement or award must be for a specific sum of money: The judgement or award must be for a fixed sum of money.
• The foreign court or tribunal must have had jurisdiction over the matter: The foreign court or tribunal must have had jurisdiction over the parties and the subject matter of the dispute, in accordance with the laws of the country in which it was issued.
• The foreign judgement or award must not be contrary to public policy or morality: Cyprus courts will not recognize or enforce a foreign judgement or award that is contrary to public policy or morality in Cyprus.

If these conditions are met, a party seeking to enforce a foreign judgement or award in Cyprus must file an application with the Cyprus courts. The application must include a certified copy of the foreign judgement or award, followed by true translation in Greek language, as well as evidence that the conditions for recognition and enforcement have been met.

Once the Cyprus court has recognized the foreign judgement or award, the party seeking to enforce it can take legal action to collect the debt or damages owed. This may include obtaining a writ of execution or other legal means of collecting the debt (see above).

In terms of the recognition of an EU judgement or award in Cyprus, under the Brussels Regulation, a judgement obtained in one EU member state can be recognized and enforced in another EU member state without the need for further legal proceedings. This means that if you have a judgement against a Cyprus debtor from another EU member state, you can apply to have the judgement recognized and enforced in Cyprus.

To apply for recognition and enforcement of an EU judgement in Cyprus, an application must be submitted to the Cyprus courts along with a certified copy of the judgement from the court that issued the judgement, translated in Greek, certifying that the judgement is enforceable and has not been appealed or set aside.

Once the Cyprus court has recognized the EU judgement, it can be enforced in the same way as a judgement obtained in Cyprus. This may involve obtaining a writ of execution or other legal means of collecting the debt (see above).

It is important to note that the process of recognizing and enforcing an EU judgement in Cyprus is generally quicker and more straightforward than the process for recognizing and enforcing a non-EU judgement. This is because the Brussels Regulation provides for automatic recognition and enforcement of EU judgements.

However, there are certain exceptions and limitations to the recognition and enforcement of EU judgements, such as where the judgement is contrary to public policy or where there is a conflict with a previous judgement or ongoing legal proceedings in Cyprus.

Therefore, it is recommended to seek the advice of one of our lawyers in Cyprus with experience in cross-border debt collection to ensure that you are following the appropriate legal procedures and that your EU judgement can be recognized and enforced in Cyprus.

What actions can I take after I have a judgement against a creditor in Cyprus (whether a Cyprus judgement or following successful recognition of foreign judgement / award in Cyprus)?

After obtaining a judgement against a debtor in Cyprus, whether through a Cyprus court or by having a foreign judgement or award recognized in Cyprus, the actions you can take to enforce the judgement and collect the debt owed to you are the enforcement and execution measures analysed above.

Finally, it is important to note that the process of enforcing a judgement in Cyprus can be complex and it is recommended to seek our advice. Additionally, it is important to consider the potential costs which include legal fees, court costs, and the possibility of the debtor challenging the judgement or taking other legal action to resist enforcement.

For all of your enquiries regarding judgements against creditors and all other debt related matters, please contact us at agp@agplaw.com All enquiries will be treated with the outmost discretion and confidentiality.

The information provided by A.G. Paphitis & Co. LLC is for general informational purposes only and should not be construed as professional or formal legal advice. You should not act or refrain from acting based on any information provided above without obtaining legal or other professional advice.