Debt Collection Agency Tunisia
Amicable Debt Collections Tunisia
1. General information
As with all Maghreb countries, Tunisia are not an easy place to collect debts. Many Tunisian debtors try to avoid payment with a range of delaying tactics, which debt collectors have to deal with.
Judges, the legal system and court organisation are inefficient, much to the detriment of creditors.
Since the Arab Spring in 2011, collection opportunities have become worse. Cosmopolite Collections maintain a professional collection process, focusing on the relationships between our clients and their debtors at all times.
Our team of collection specialists carry out the collection process in-house, contacting debtors both verbally and in writing whilst adhering to federal and state laws.
When trading with Tunisian companies, it is highly recommended to demand bills of exchange covering the whole debt prior to delivering the goods.
This would avoid any future discussions and allow creditors to file a payment order in case of non-payment, which is much faster than an ordinary lawsuit.
1.2. Local agents
Our collectors may take the decision to increase pressure through local agents out of court, if in-house debt collection attempts fail. These agents may appoint a bailiff, who will send an out-of-court formal notice of payment to the debtor and will organise a visit if appropriate.
Depending on the specific details of the case, this local agent may be a lawyer who will continue to try to come to a settlement without the need for a court case.
During the amicable phase, it is prohibited to transfer any amount of interest or costs that do not correspond to those mentioned in the sales and customs documents, even if both parties agree.
The only transferable sums are limited to the value of the goods indicated on the invoices.
Consequently, interest and costs are not transferable to the creditor, even if agreed by both parties. It only becomes possible to transfer the interest and contractual indemnities resulting from the agreement of the parties in the frame of legal proceedings.
In commercial dealings, parties may agree on commonly used interest (used in their business), on condition that it does not reach a level that can be considered usurious.
The date from which this interest rate will begin to be applied can be fixed by the parties in their agreement.
In commercial business, the interest rate varies generally between 6% and 10% and cannot be capitalised.
2. Legal Collections
2.1. General information
Depending on the outcome of the amicable debt collection procedure, the documents available and the debtor’s solvency, Cosmopolite Collections will always make the most sensible recommendation as to whether or not it is worthwhile and economical to start legal proceedings.
The lawyers of debtors have recently started resorting to a new legal remedy to counter actions for payment brought against their clients. In a commercial relationship that is subject to Private International Law (PIL), it is the characteristic performance that determines the rules of jurisdiction.
Under Tunisian law, it is the rules of the country of the supplier that govern this relationship in cases where the parties have failed to designate the applicable law by mutual agreement.
As such, in the majority of cases, Tunisian law is more favourable when it comes to the time limits for appeals and the means of evidence in commercial matters.
The time limit to lodge an appeal is 15 years between traders, which starts from the transaction date. In terms of bringing proof of contract performance, it is the freedom of evidence rule that applies in commercial matters.
It therefore seems wise to obviate this legal remedy by designating Tunisian law as the sole applicable law and to designate the Tunisian courts as the sole courts of competent territorial jurisdiction in the event of appeals.
This will give you the benefit of a long time limit to lodge an appeal (15 years), thereby avoiding the case from becoming time-barred, given the fact that the institution of the court proceedings is greatly delayed.
On the other hand, opting for the Courts of Tunisia avoids the court actions to be instigated from being dispersed, and in some cases, will allow you to speed up the length of time it takes to obtain certified copies of rulings compared to other courts inside the country.
2.2. Required documents
Tunisian law requires original documents – invoices, orders and shipping documents.
However, a judge can accept certified true copies of the documents made by a third authority (notary, municipality), which can be problematic. Documents must be in French or Arabic; otherwise, translation costs will be invoiced.
2.3. Legal dunning procedure
A payment order is the quickest procedure but it can only be used if the claim cannot be disputed. To be able to use this procedure, Cosmopolite Collections need to view documents such as bills of exchange, a written acknowledgement of debt and unpaid cheques.
2.4. Lawsuit in Tunisia
An ordinary lawsuit is the most frequently used legal proceedings in the absence of indisputable documents.
This procedure can be very long and complex and is frequently adjourned for a range of reasons, including lawyers’ delaying tactics, extreme formality, bureaucracy of the legal system and judges and missing documentation.
Enforcement of the final judgment is often very problematic if the debtor does not pay voluntarily to avoid attachment of movable or immovable property or seizure of their bank accounts.
Most of the time, the legal proceedings are so long that debtors have enough time to organise their insolvency.
2.5. Debt Collection Costs Tunisia
Court costs are not particularly high in Tunisia. There is very little difference if Cosmopolite Collections proceed with a payment order or a writ of summons. Creditors have to pay the costs of the bailiff plus EUR 50. Creditors also have to settle the registration fees and judgment stamp, which are fixed fees of EUR 100 for the writ and EUR 50 for the payment order.
The party that appeals a judgment has to pay a EUR 20 appeal fee and EUR 50 to summon the adversary.
Once a judgment is successfully executed, creditors have to pay registration fees of 5% of the amount mentioned in the judgment.
Lawyers’ fees depend on the specific case, varying from EUR 400 to EUR 1,500 and an extra EUR 500 to EUR 2,000 for an appeal. Execution costs and fees vary considerably depending on the execution methods used.
2.6. Expected time frame
A judgment usually takes two years or more, depending on the specifics of the case. The debtor can still appeal the decision, which can add to the case’s time.
2.7. Interest and costs in the legal phase
The legal interest rate, which is currently 6% in commercial matters, is fixed by the central bank according to the economic and financial situation.
The interest can be granted by the court without being the object of a precondition, but this interest will apply only from the date of the summons up to full payment.
Attorneys’ fees might not be charged in full to the debtor. In case a judgment is rendered in favour of the claimant, the court usually condemns the losing party to pay between TND 300 and TND 500 to the opposing party to cover part of the attorneys’ fees.
3. Insolvency proceedings
3.1. General information
The aim of insolvency proceedings is to pay out all creditors equally by liquidating the assets of the debtor company or collecting the enforceable income of the individual who is declared bankrupt.
Bankruptcy Bankruptcy can be declared either on the written declaration of the debtor or on summons of a creditor. The court can also take the initiative to declare the bankruptcy of the debtor. From the declaration of the bankruptcy, the creditors lodge their claims to the receiver (syndic) with a recapitulative listing of the attached documents with evidence of the debts.
Creditors that do not produce their claims within eight days from the decree of bankruptcy are warned by insertions in newspapers and by letter by the receiver that they have 15 days left to lodge their claims. If the creditors are located outside the Tunisian territory, the deadline for the declaration of debt is increased by 30 days.
If the debts are disputed by the receiver (syndic), the creditors will be informed by registered letter.
The creditors then have a deadline of eight days to supply a written or verbal explanation.
Once the checking of the claims made by the receiver has ended – which must be within three months from the declaration of bankruptcy – the receiver sends to the clerk’s office the statement of debts.
The clerk’s office then warns the creditors of the deposit of this statement by letter, indicating the sum for which their claims appear there.
The clerk’s office informs the creditors of whose claims are disputed by registered letter. Act on the Recovery of Companies in Economic Difficulty The Act on the Recovery of Companies in Economic Difficulty allows all managing directors of companies to apply to the president of the court of first instance, which has territorial jurisdiction to be awarded the benefit of the regime set out under the act, which is aimed at providing relief for companies facing difficulties to continue their activity.
The act sets out two settlement mechanisms: amicable and court-ordered settlement.
1/ Amicable settlement
The amicable settlement is set in motion in response to a petition from a managing director of the company concerned, addressed to the president of the court, based on a statement of the financial position of the company, detailing the debts and their maturity dates, along with a recovery plan.
If deemed expedient by the president of the court, the procedure will be initiated and a mediator will be appointed with the remit of helping the debtor and the creditors reach an agreement within three months, which may be extended by another month.
The launch of the procedure causes all lawsuits and the enforcement of the recovery of all prior claims to be suspended. There are no restrictions for the parties to reach an agreement (payment of debts by instalments, cancellation of the debts, halting the accrual of interests, etc.).
If the terms are reached, the agreement is ratified by the president of the court. If the debtor defaults on their obligations, any of the parties concerned are free to petition the court to annul the agreement. If no agreement is reached within the time limit set out in the act, the mediator informs the court, which will dismiss the petition for an amicable settlement.
2/ Court-ordered settlement
Companies that become insolvent and are no longer able to service their debts may call on this procedure.
The court-ordered settlement procedure is initiated in response to a written petition for that effect addressed to the president of the court by the company’s managing director or by any of their creditors. To this end, the debtor is to file a statement specifying the names of the creditors and a list of their employees.
If deemed expedient by the president of the court, the procedure is initiated and an official receiver and a certified public accountant are appointed. The official receiver draws up a list of the creditors, announces the merit of the receivership petition and puts together a report for the court where a settlement plan is suggested or a determination is made that the plan is inexpedient.
The court will rule on the application for a court-ordered settlement after hearing all the parties. The court may declare the debtor bankrupt or impose court-ordered liquidation.
The court may ratify the proposed settlement plan or decide to initiate an observation period. In that case, the court will appoint a court-ordered administrator who will put together a recovery plan.
During the course of the observation period, all individual legal action and all enforcement proceedings of prior claims are suspended. The creditors need to make sure that their debts dating from the time before the date on which the ruling is returned are duly registered within 30 days from the date of the publication in the official journal.
All claims asserted beyond this period will not be registered.