Debt Collection Agency Morocco
Amicable Debt Collections Morocco
1. General information
We follow a collection process with the objective of retaining the relationships between our clients and their debtors whenever possible.
Our staff of collection professionals carry out the first collection tier in-house. We relentlessly pursue debtors verbally and in writing within the bounds of the country’s law.
1.2. Local agents
We offer field services and can visit debtors regularly when the need arises.
Depending on the specific details of a case, our local partner – may be a lawyer – will continue to try to come to a settlement without the need for a court case.
We always charge interest to debtors, calculated from the base rate set at 8% by the Bank Al-Maghrib, plus two points.
Moroccan debtors are used to paying late payment interest, though often the actual amount of the interest payment is considered a matter of negotiation between debtors and collectors. In this case, we talk about conventional interest.
1.4. Debt Collection Costs Morocco
In Morocco, debt collection costs are chargeable to debtors, provided that the creditor has entered into a special contractual agreement.
This can be taken into account as long as the debtor actually agreed to the terms.
From a cultural point of view, Moroccan debtors are used to paying debt collection costs, though often the actual amount of these costs is considered a matter of negotiation.
2. Legal Debt Collections Morocco
2.1. General information
Entering into legal proceedings is possible without a prior warning to the debtor.
However, the courts accept that mediation takes place between the creditor and the debtor. In order to shorten the amicable phase of the legal proceedings, it is practical to prove to the courts that all pre-court efforts were fruitless by pointing out prior correspondence.
2.2. Required documents
In order to apply the legal dunning procedure, we need the original contract, invoices and a clear statement of account indicating payments and credit notes that have been booked regarding the outstanding invoices.
In the case of a regular lawsuit procedure, the original complete contractual documentation should be available, starting with the contract, orders, order confirmations, delivery notes and invoices. Basically, every step of the trading relationship should be provable by documentation.
In case of dispute, proof of the conversations between the creditor and the debtor should also be kept and provided to our lawyers. In the case of oral negotiations, we need the visit or negotiation reports and the names of the witnesses.
2.3. Legal dunning procedure
This procedure is only applicable for money debts and only if the debtor is traceable.
However, if the debtor is made unknown on the basis of a report drawn up by a bailiff, they may be subject to a curator’s procedure in order to obtain a default judgment.
In order to obtain an enforceable judgment by the legal dunning procedure, first the court orders and secondly the enforcement order need to be applied one after another and served to the debtor within the time frames stipulated in the Moroccan civil process law.
The debtor can appeal in both stages, which would transfer the dunning procedure into a regular lawsuit procedure.
2.4. Lawsuit in Morocco
The regular lawsuit procedure is initiated either directly after the amicable collection has failed due to a dispute by the debtor or directly after the legal dunning procedure if the debtor has appealed.
2.5. Debt Collection Costs Morocco
In Morocco, only court costs are determined by the provisions of the law, which are calculated on the basis of a fixed rate or proportionally and are not subject to any negotiation.
In addition, expert fees may also incur. The amount is set by the judge and may be increased or decreased by either the designated expert or the party claiming that the costs are exaggerated.
Lawyers’ fees are freely negotiated between the client and the client’s lawyer and depend on the value and complexity of the case.
2.6. Expected time frame
The average duration of a legal dunning process is between eight and 12 weeks, whereas a court procedure can take up to 12 months or longer depending on the complexity of the case.
Hearings are often postponed when being scheduled by the judge.
2.7. Interest and costs in the legal phase
Interest (at the legal interest rate) can be claimed in Morocco. However, the losing party has to bear the costs of the legal proceedings according to the Moroccan civil process law.
3. Insolvency proceedings
3.1. General information
The aim of the insolvency proceedings, called judicial liquidation in Morocco, is to pay out all creditors by liquidating the assets of the debtor company or collecting the enforceable income of the individual who is declared bankrupt.
Creditors who hold mortgage guarantees, called preferred creditors, the tax authorities and employees are paid in priority. Creditors who do not hold collateral, called unsecured creditors, will be paid in the event of a balance.
3.2. Insolvency proceedings
In Morocco, judicial liquidation is regulated by articles 619 to 636 of the Commercial Code.
It is the result of the failure of judicial redress. It is opened when the situation of the debtor company is irremediably compromised. This is the solution that the court retains when there is no longer any serious chance of survival for the company.
The court will at that time declare the liquidation and the judge-commissioner will deal with the liquidation of the debtor’s property in concert with the trustee acting in the name and in the interest of the creditors.
The judicial liquidation will ipso jure disqualify the debtor from the administration and disposition of their property, including those that the debtor has acquired in any capacity whilst the liquidation has not been closed.
The rights and actions of the debtor in respect of the debtor’s estate will be exercised throughout the period of liquidation by the trustee. T
he judge will appoint the trustee to handle the judicial liquidation proceedings under the supervision of the judgecommissioner.
At any time, the court may decide, even of its own motion, after hearing the head of the debtor company and on the basis of a report from the judge-commissioner, to close the judicial liquidation:
When there is no longer any outstanding liability or the trustee has sufficient sums to satisfy the creditors When the continuation of the liquidation proceedings is rendered impossible by reason of the insufficiency of the assets. The judicial liquidation has two stages:
- The realisation of the assets – This is the sale of the assets of the debtor. It is the judge-commissioner who fixes the prices for the auction based on the report from an expert appraisal.
- The clearance of liabilities – This involves payment to the creditors and the closing of liquidation transactions.
The trustee will pay the creditors with the money obtained from the auctions. Here the receivables contracted by the debtor company during the period of judicial redress will have priority. In the same way, it is at this stage that the liens of the creditors come into play.
At the end of the liquidation, the trustee makes the accounts. In other words, the trustee is required to keep accounting books justifying the trustee’s action on the assets of the debtor company.
The common thread between liquidation and judicial redress is the interest given to the creditors. This is for the court to help the debtor company clear their liabilities and continue their business.
3.3. Required documents
In order to lodge a claim on behalf of our client, we need:
- An original power of attorney
- Copies of invoices
- Copies of contracts
- Copies of orders, order confirmations and delivery notes
- Copies of general conditions of sales, if there are any
- Copies of any other correspondence that may verify the claim.
3.4. Expected time frame and outcome
The deadline to lodge claims is two months and is related to the complexity of the procedure.
If the creditor is located outside Morocco, this deadline is extended by two additional months.
The total duration of judicial liquidation proceedings is not quantifiable, but is between five and ten years.