Commercial debt recovery is one of the most crucial components for maintaining business stability and liquidity. In Georgia's dynamic business environment, payment defaults between companies are a frequent problem. This can involve unpaid invoices, breached contracts, or non-payment for services rendered. Debt that is not recovered on time not only disrupts a company's cash flow but also threatens its operational activities. Commercial debt recovery involves a legal process aimed at recovering funds owed by legal entities (B2B). This process requires specific knowledge as it involves not only civil law but also tax and corporate law.
The involvement of a professional lawyer ensures that debt recovery is conducted efficiently, in full compliance with the law, and within the shortest possible timeframes. Often, debtor companies attempt to evade responsibility by hiding assets or artificially initiating bankruptcy proceedings. Legal.ge allows you to connect with specialists who have experience managing complex commercial disputes and know how to compel an unscrupulous partner to fulfill their obligations.
What Does Commercial Debt Recovery Service Cover?
This service covers the full cycle of debt recovery, from preventive measures to forced enforcement:
- Debt Audit and Analysis: Legal assessment of contracts, invoices, and acceptance acts to determine the prospects of recovery.
- Negotiation and Mediation: Communication with the debtor company to agree on debt restructuring or a phased payment schedule without court intervention.
- Order of Payment Proceedings: A simplified and fast legal route for undisputed claims, saving time and costs.
- Litigation and Arbitration: Representing interests in court or arbitration, preparing lawsuits claiming the principal amount, penalties, and damages.
- Interim Measures: Seizing the debtor's bank accounts and property before the dispute concludes to prevent asset alienation.
- Enforcement Proceedings: Executing court decisions through the National Bureau of Enforcement (auctions, garnishment).
Common Real-World Scenarios
Commercial debt disputes often unfold according to the following scenarios:
The first scenario is "Goods Delivered, Payment Unpaid." A distribution company delivered products to a supermarket chain, but the chain delays payment, citing sales issues. Violation of contract terms provides grounds to claim penalties.
The second case is "Work Performed." A construction company finished a project, but the client refuses final settlement, claiming quality issues, even though the acceptance act is signed. This is a classic dispute where documentation is decisive.
The third scenario is "Debtor Disappearance." The debtor company ceases operations, the office closes, and the director stops answering calls. Lawyers initiate an investigation to locate assets and potentially hold partners liable.
The fourth situation is "Bankruptcy Threat." The debtor threatens to declare bankruptcy if you demand the debt. A lawyer must assess how real this threat is and whether a compromise is worth it.
Georgian Legal Framework and Regulations
Commercial debt recovery is regulated by civil and procedural legislation:
- Civil Code of Georgia: Regulates obligations, breach of contract, and rules for damages compensation.
- Civil Procedure Code: Defines rules for dispute resolution, including simplified proceedings for undisputed claims.
- Law on Enforcement Proceedings: Establishes mechanisms for the forced execution of decisions.
- Law on Rehabilitation and Collective Satisfaction of Creditors: Regulates insolvency (bankruptcy) processes, which is important if the debtor company is on the verge of bankruptcy.
Process and Stages
The process begins with a documentation audit and sending a formal claim (warning) to the debtor. Often, a correctly drafted legal letter is sufficient to return funds. If negotiations fail, a lawsuit is prepared. In parallel, the lawyer requests interim measures (seizure) so the debtor cannot hide property. After obtaining a court decision, the enforcement of the writ of execution begins — deducting funds from bank accounts or selling property at auction.
Why Legal.ge?
Commercial debt recovery requires speed and professionalism. Delayed response often means lost money. Specialists presented on Legal.ge are results-oriented. They will help you not only obtain a court decision but also achieve actual recovery of funds, which is decisive for business.
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