The Lawful Procedure of Collecting a Consumer Debt
Collecting a debt from a consumer in Georgia is a strictly regulated process: the creditor may not arbitrarily intrude into the debtor's life — everything happens through the National Bureau of Enforcement, under the procedure established by the Law on Enforcement Proceedings. On this page we explain the four norms significant from the consumer's standpoint: the issue of the writ of enforcement (Article 20), the commencement of enforcement and its effects (Article 25), the protection of the debtor's interests during compulsory enforcement (Article 31), and the expenses of enforcement (Article 39).
For the consumer these rules carry a two-fold value: on the one hand, they make compulsory enforcement predictable — it is known who acts, on what basis and within which periods; on the other, they also provide instruments of protection — in the form of consideration of circumstances, the postponement of measures, and the fair allocation of expenses.
The Writ and the Commencement of Enforcement
Under Article 20, enforcement proceedings are not allowed without a writ of enforcement. The writ is issued on the decision subject to enforcement under this law, and it is issued to the creditor. For the consumer this means: collection begins only when a decision that has entered into legal force or another act provided by law exists and a writ has been issued on it — enforcement does not begin of itself through the creditor's letters or calls.
Article 25 establishes the manner of commencement: the Bureau commences proceedings on the basis of the creditor's written application and the writ. One effect of this moment matters to the consumer: in the enforcement of a decision contemplating the growth of the claim on the principal through interest and/or a surcharge, the accrual of interest and/or the surcharge on the principal ceases from the day the enforcement proceedings commence. Thus, after the commencement of proceedings the principal stops growing — a protective circumstance the debtor should know.
Protection of the Debtor's Interests During Compulsory Enforcement
Article 31 regulates protection in special circumstances. Where a special situation has arisen at the place of enforcement — the debtor's or a family member's illness, death or another emergency — and the continuation of the respective measure does not correspond to the general principles and norms of morality, the Bureau may, on the debtor's application, postpone this or that measure of compulsory enforcement for a period of up to 6 months. The Bureau is entitled to extend its own period once more for up to 6 months.
If, after the expiry of that period, the factual situation does not change, the court may, on the debtor's application, annul the enforcement measure wholly or in part, prohibit it, or temporarily suspend this or that measure for up to 3 months. If, conversely, the factual situation changes, the court may, on the creditor's application, annul or amend the ruling on enforcement — the balance works for both sides. These norms are especially significant in consumer disputes: a family emergency lawfully slows the pace of enforcement.
The Expenses of Enforcement
Article 39 provides that the enforcement of a defined category of decisions — including state duty and fines — may be financed from the state budget, the budget of the autonomous republic or the municipal budget. The expenses of storing, transporting and the like, incurred by the Bureau in connection with the enforcement of a decision, are charged to the debtor and collected together with the enforceable claim, where the expense was incurred by the Bureau under a contract with a third person and is confirmable by appropriate documentation.
Two tasks face the consumer here. First, the establishment of the expense: an amount presented by the Bureau must be substantiated with documents, and the debtor is entitled to demand that substantiation. Second, the fairness of the expenses: where the amount of the claim is small, it is questionable whether the expenses exceed reasonable limits — and that argument also sounds in court.
What the Creditor May Not Do and What the Consumer May Do
Under the logic of the enforcement law, every forcible act of the creditor passes through the channel of the Bureau: the creditor applies to the Bureau, and the Bureau conducts the enforcement measures. From the consumer's side the law gives an active position: by application, to demand the postponement of a measure because of a special situation; to apply to the court for the annulment or suspension of a measure; and to monitor the substantiation of the expenses. Aggressive forms of communication with the consumer are subject to a separate legal regime whose assessment exceeds the enforcement law — what matters here is only that even at the enforcement stage a frame of rules exists which both parties must recognize.
Frequently Asked Questions
May a creditor collect the debt directly?
No — compulsory enforcement happens only through the Bureau, on the basis of the creditor's application and the writ; proceedings are not allowed without the writ.
Does interest cease on commencement?
Yes — the accrual of interest and/or the surcharge on the principal ceases from the day the enforcement proceedings commence, apart from the exceptions provided by law.
How does the law protect a family emergency?
On the debtor's application the Bureau postpones a measure for up to 6 months and extends once for up to 6 months more; where the situation persists, the court annuls the measure or suspends it for up to 3 months.
Who bears the enforcement expenses?
Defined expenses — storage, transport and the like — are charged to the debtor and collected together with the claim, where documented; the enforcement of state duties and fines may also be financed from the budget.
How We Help on Legal.ge
The attorneys at Legal.ge represent both sides in consumer-debt enforcement cases: in the consumer's position — monitoring the lawfulness of enforcement, applications for the postponement and suspension of measures, criticism of expenses; in the creditor's position — preparing the applications and accompanying the proceedings in observance of every boundary of the law.
If enforcement is under way against a consumer or you are a creditor needing lawful collection, contact us at Legal.ge — we will assess the situation and plan the actions under the exact norms of the enforcement law.