Acting for creditors
Recovery usually begins well short of litigation, with a properly drafted demand or judicial letter. Where that does not produce payment, Maltese procedure offers effective tools, including precautionary warrants to secure assets before judgment and executive warrants such as garnishee orders to enforce afterwards.
We advise on which is proportionate. Securing a debt aggressively against a counterparty who would have paid anyway can cost more in goodwill than the debt is worth.
Acting for debtors
We also act for those on the receiving end. That may mean challenging a claim that is overstated or time-barred, contesting a precautionary warrant that is disproportionate, or negotiating a realistic settlement schedule that avoids enforcement entirely.
The recovery process, in order
- Assessment of the debt, the documentation and any prescription issue
- A formal letter of demand, then a judicial letter where needed
- Precautionary warrants to secure assets where there is a risk of dissipation
- Proceedings before the competent court
- Executive warrants, including garnishee orders, to enforce judgment
- Negotiated settlement at any point where it serves the client better
A commercial view of recovery
Recovery is a commercial decision as much as a legal one. Before proceedings are issued we look at whether the debtor can realistically pay, what security exists, and what the recovery is likely to cost relative to the sum owed. There is little point in obtaining a judgment against a counterparty with nothing to enforce against.
Where the debtor is a continuing trading relationship, we also weigh what enforcement will cost commercially, and will often recommend a structured settlement over a warrant.
Preventing the next bad debt
Recovering a debt addresses one problem. The businesses that stop needing us are the ones that change what happens before the sale: credit terms that are written down, retention of title where goods are supplied, personal guarantees where the counterparty is thinly capitalised, and interest provisions that actually apply.
We review the terms on which a business extends credit and tighten the provisions that determine whether the next debt is recoverable. It is considerably cheaper than litigating the one after it.
Common questions
- How quickly should I act on an unpaid debt?
- Promptly. Claims are subject to prescription periods, and the practical prospects of recovery fall the longer a debt is left. An early judicial letter also demonstrates that the creditor is serious.
- Can assets be frozen before judgment?
- Maltese procedure allows precautionary warrants in appropriate cases, which can secure a debtor’s assets pending the outcome. Whether one is available and appropriate depends on the facts.
- A warrant has been issued against me. What now?
- Contact us quickly. There are procedures to contest or reduce a precautionary warrant, and the time to use them is immediately.