Introduction and Service Overview
Simplified proceedings are designed to satisfy monetary claims quickly and efficiently. However, legislation recognizes that the best way to resolve a dispute is always a peaceful agreement between the parties. The offering of a settlement proposal and the approval of its conditions in simplified proceedings serve exactly this purpose. When the National Bureau of Enforcement sends a notification to the debtor about the debt, the debtor has the right not only to pay the debt or submit a protest but also to offer a settlement to the creditor—for example, phased repayment of the debt (installments), forgiveness of interest, or extending the payment deadline. This service provides an opportunity to avoid harsh coercive measures, such as freezing accounts or selling property, allowing both parties to reach a mutually acceptable compromise.
The approval of the settlement conditions by the bureau grants this agreement legal force. This means the creditor is protected—if the debtor violates the settlement terms, the creditor will not need to restart the dispute; they can directly demand the forced enforcement of the agreement. On the other hand, the debtor maintains financial stability and avoids additional enforcement costs and stress.
What the Settlement Proposal Service Covers
The settlement process in simplified proceedings involves several legal and communicative steps. The service begins with the debtor's initiative—when they receive the debt notification, a lawyer helps them develop a realistic proposal that is acceptable to the creditor. This proposal is formulated in writing, detailing a new payment schedule, the amount of monthly installments, and the deadlines.
The bureau forwards this proposal to the creditor. The creditor's lawyer studies the offer, evaluates the risks, and together with the client makes a decision: to accept the terms, reject them, or propose counter-conditions. If the parties agree, an official settlement act is drafted. The service concludes with the approval of this act by the National Bureau of Enforcement. The bureau confirms the settlement, thereby terminating the simplified proceedings by mutual agreement, and a forced payment order is not issued as long as the debtor fulfills the settlement conditions.
Common Situations and Scenarios
In practice, the most common scenario involves consumer loans or debts to microfinance organizations. For example, a debtor owes 5,000 GEL. The notification from the bureau states that they must pay the full amount within 10 days. The debtor does not have this amount at once but can pay 500 GEL per month. They make a settlement proposal (installments over 10 months). The financial organization realizes that forced enforcement (searching for property, auctions) might drag on much longer and agrees to the proposal. The bureau approves the schedule.
Another example is a corporate dispute where one company owes a small debt to another for services rendered. The debtor company acknowledges the debt but proposes to write off a portion of it (e.g., forgiving accrued penalties) in exchange for the immediate payment of the principal amount. The creditor agrees, the bureau approves the settlement, the debtor pays the principal, and the dispute is resolved without any seizures, preserving a good reputation for both businesses.
The Georgian Legal Framework
The settlement procedure in simplified proceedings is regulated by the Law of Georgia on Enforcement Proceedings. The legislation clearly defines the debtor's right to submit a written settlement proposal within 10 days of receiving the notification. The bureau is obliged to forward this proposal to the creditor immediately. The creditor is given a 5-day period to respond.
According to the law, if the creditor does not agree to the settlement, the simplified proceedings continue, and a payment order is issued. However, if they agree, the chairman of the bureau (or an authorized person) approves the settlement conditions. A crucial legislative provision is that the approved settlement act constitutes an enforceable document. This means that if the debtor violates the settlement schedule, the creditor directly applies to the execution officer, and forced enforcement begins without the need for repeated litigation.
Step-by-Step Process
The process starts when the debtor receives a warning from the bureau. The first step is consulting a lawyer and formulating the settlement (installment) conditions. The second step is submitting this written proposal to the National Bureau of Enforcement within the statutory 10-day period. In the third stage, the bureau electronically or physically sends the proposal to the creditor.
In the fourth stage, the creditor reviews the conditions and provides written consent (or refusal) to the bureau. If consent is received, the fifth stage involves the bureau officially approving the settlement act and handing it over to both parties. The sixth and final stage is the fulfillment of the agreement—the debtor pays the amounts according to the schedule, and the simplified proceeding is considered successfully concluded.
Why legal.ge and the Need for a Lawyer
Although a settlement is a peaceful process, legally structuring it requires great precision. The debtor must know how to draft a proposal that the creditor will not refuse. Conversely, the creditor must ensure that the settlement act includes all safety mechanisms in case the debtor violates the terms. Even a small mistake can lead to serious financial damage for either party.
The legal.ge platform is the best space in Georgia to find experts in negotiations and enforcement disputes. The lawyers featured in our directory will help you conduct constructive dialogue, protect your interests when drafting the settlement text, and ensure the rapid navigation of bureaucratic procedures at the bureau. Do not let a dispute destroy your business relationships or financial stability—find a reliable advisor on legal.ge and reach a reasonable settlement.
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