1.1. General Procedure for Debt RecoveryProcedure for Filing a Lawsuit:When opting for general litigation in a Georgian court, the creditor submits a statement of claim at the place of contract execution or the location of the defendant. As courts of first instance, district and city courts handle debt recovery cases, including Tbilisi, Batumi, Kutaisi, Telavi, and others. The claim is prepared in accordance with the prescribed format, always in Georgian, and may be submitted electronically through the official judicial system portal or in paper format. After registration, participants receive a login and password for access to the electronic case management system, where they can track case materials and the current status of the proceedings. A complete set of evidence confirming the existence of the debt must be attached to the claim. The lawsuit may be signed either by the plaintiff or their authorized representative acting under a power of attorney. Although having a lawyer is not mandatory, professional legal support significantly increases the chances of success in complex cases.
The duration of case review in the court of first instance depends on the complexity of the case and the court's workload, averaging seven months. The judge has the right to postpone the hearing or declare a recess. If the defendant fails to appear in court but has been properly notified, the court may issue a default judgment, which is subject to appeal. The court decision may be announced within one month after the completion of the case review.When filing a lawsuit, a state duty is charged. In debt recovery cases in Georgia, the fee is 3% of the claim amount, but does not exceed 3,000 GEL for individuals and 5,000 GEL for companies.
Appellate Proceedings and the Court of Cassation:After the first-instance court issues its decision, the parties who disagree with it have the right to file an appeal within 14 days. Generally, appellate courts in Georgia review appeals with a panel of three judges, but in some cases, a single judge may handle the case. The state duty for filing an appeal is 4% of the claim amount, but does not exceed 5,000 GEL for individuals and 7,000 GEL for companies. If a party disagrees with the appellate court's decision, they have the right to file a cassation appeal with the Supreme Court of Georgia. The deadline for filing a cassation appeal is 21 calendar days from the date the party receives the reasoned decision/ruling of the appellate court. Cassation appeals are reviewed by a panel of judges specializing in legal interpretation and can take up to 6 months. The decision of the Supreme Court on a cassation appeal is final and cannot be further appealed.
Enforcement of Court DecisionsOnce a court decision becomes legally binding (if no further appeals are made), the creditor receives an enforcement document, which is submitted to the enforcement bureau to initiate forced debt collection in Georgia. A state duty of 2% of the debt amount is charged to open enforcement proceedings, but this amount is reimbursed to the creditor after the debt is fully collected. Enforcement proceedings remain valid for 10 years. For foreign creditors, debt collection is conducted exclusively in Georgian lari, requiring them to open an account in a local bank or authorize a representative to manage the transactions.
Interim MeasuresThe success of debt recovery in Georgia largely depends on the timely application of interim measures. The court may issue a ruling on securing the claim, aimed at preserving the debtor’s assets until the final decision is made. The applied measures include seizure of liquid assets, prohibition on asset disposal, and temporary restrictions on transactions involving the debtor’s property, which significantly increase the chances of successful debt collection in Georgia.
Statistics and Key Features:
- Average case duration: First-instance court – 5–6 months, appellate proceedings – around 6 months, total duration – 1 to 1.5 years.
- The likelihood of successful debt recovery in Georgia directly depends on the timely application of interim measures and the completeness of the presented evidence.
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1.2. Simplified Proceedings (Uncontested Proceedings with a Court Bailiff)Essence of the Procedure:The simplified procedure is used for debt recovery in Georgia without a full court trial when the obligation is undisputed and the debtor does not contest the debt.
Procedure Stages:1.Filing an Application:The creditor submits an application to the National Bureau of Enforcement, providing supporting documents that confirm the debt. The documents must be in Georgian and can be submitted electronically or in paper format.
2.Debtor Notification:A bureau officer sends a notice to the debtor, explaining the consequences of failing to fulfill obligations.
3.Debtor’s Response (Within 10 Days):The debtor may fully or partially repay the debt, file a written objection, acknowledge the claim, or propose a settlement.
4.Decision Making:If the debtor does not file an objection or acknowledges the debt, the enforcement bureau issues a decision in favor of the creditor and initiates forced debt collection.
5.If the Debtor Files an Objection:If the debtor objects, the creditor must proceed with litigation. Any expenses incurred during the simplified procedure can later be recovered in court.
Cost:The fixed fee for application processing is 200 GEL, and the fee for securing measures is 100 GEL.
Advantages:• A decision can be issued within a few weeks, significantly accelerating the debt recovery process in Georgia.
• Lower legal costs if the debtor does not contest the claim.