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Debt Collection in Gibraltar 

Debt Collection in Gibraltar 

Debt collection in Gibraltar becomes a necessity when a business has overdue payments. While an expected payment time can be between 30 to 45 days, a company can start pre-court debt collection once the agreed payment period ends to ensure that it maintains its financial goals.

Investors who open a company in Gibraltar can rely on the assistance offered by our local team of experts also if they wish to start the debt collection process.

Amicable debt collection in Gibraltar

The first phase of debt collection is usually the negotiation one. This is based on finding common ground with the debtor and agreeing on mutually beneficial payment terms. In practice, this can mean working out a payment schedule that the debtor will need to observe.

Our agents who specialize in debt recovery in Gibraltar can help you recover undue payments. For this purpose, we will observe several general steps (adapted to each case as needed):

  • Evaluate the size of the debt and how long it is overdue;
  • Consider which debts require immediate action and which can be postponed for a while;
  • Assess the relationship with the debtor and determine the importance of salvaging this business relationship;
  • Review the services agreement with the debtor and prepare to outline the agreement payment terms to the debtor based on this document;
  • Prepare an initial contact with the debtor via e-mail, letter, or telephone.

These initial steps will prepare you to better negotiate debt collection in Gibraltar and will allow you to maintain an overall image of the situation your company is in.

If the debtor remains unresponsive or refuses to pay the undue amounts, business owners can proceed to the next phase, which is a court-ordered collection.

Legal proceedings for debt recovery in Gibraltar

The defendant is served the summons and if on the date of the hearing does not appear before the court, then the judges may decide to go on with the hearing of the trial in his absence.

If the court has issued a judgment for the payment of the debt, the Supreme Court can order the enforcement of this decision. The types of assets that can be subject to enforcement include:

  • bank accounts;
  • tangible movable property;
  • immovable property.

The bailiff will follow the guidelines for seizing the assets and will proceed to only take those goods that belong to the defendant.

Some of the following key issues should be taken into account in the case of debt collection in Gibraltar:

  • Claims of up to £10,000 are overseen by the Small Claims Jurisdiction;
  • The writ of execution is valid for 12 months;
  • The writ of execution or warrant can be extended for another 12 months if ordered by court;
  • The debtor has 5 days to enter into an agreement with the bailiff, otherwise, these goods can be removed.

We advise those interested to work with our team of local lawyers.

Alternative dispute resolution for debt collection

Court debt collection can be a lengthier process compared to using alternative dispute resolution methods.

Mediation and arbitration can be suitable for debt collection in Gibraltar. The former is led by a mediator who can help the parties negotiate, but will not have the power to issue a decision for the dispute. The latter is also based on the help of a neutral third party, however, the arbitrator has the authority to issue a final decision.

Mediation and arbitration can both prove valuable in debt collection cases, irrespective of the amount of the owed debt. Additionally, these can be preferred in cases involving international debt collection.

Our team can answer your questions about debt recovery, resolving debt disputes with mediation or arbitration, as well as other matters. If you are an investor who has set up a company in Gibraltar and is now facing overdue debts, we advise you to take action.

For a more in-depth guide to debt collection in Gibraltar, do not hesitate to contact us.