How to recover a debt - from IOU to enforcement
Most loans in Georgia are made on trust: to a relative, a friend, a business partner, often without an IOU - by bank transfer and a single messenger message. And when the repayment date passes, the creditor asks two questions: can I prove anything at all, and is court worth it. The answer to both is usually "yes", but only in the right order.
This guide divides the road to recovery into five stages - gathering evidence, a written demand, simplified proceedings, the claim, enforcement - and for each says what it costs, how long it takes and when the next stage is no longer needed. At the end: limitation, which turns a debt into a "natural obligation" in three years.
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What a debt is in law and why an IOU is not essential
A loan agreement is concluded at the moment the money is handed over and both sides understand that it must come back. The law requires written form above a certain amount, but failure to observe the form does not void the agreement - it only makes proof harder. A bank transfer with the purpose "loan", correspondence in which the debtor confirms the amount and the date, witnesses who were present at the hand-over, partial repayment - all of this is evidence, and often stronger than an IOU.
A debt recovery case asks three separate questions: did the debt exist, has the repayment date arrived, and does the debtor have assets from which the debt can actually be recovered. The court answers the first two; the National Bureau of Enforcement answers the third. Many creditors ask the third question last, although it is the one that decides whether the first two are worth starting.
The debtor's typical arguments are the same everywhere: "it was a gift", "I already repaid in cash", "no date was agreed", "it is time-barred". Each has a specific counter-evidence, and the first stage of the guide is precisely gathering it - long before court.
The road to recovery - five stages, each cheaper and faster than the next
Most cases end before court: a properly written demand letter recovers a significant share of debts, a payment order another share. Court is the fourth step, not the first.
Fixing the evidence
A bank statement with the transfer, screenshots of correspondence with date and number (ideally notarised), an IOU or contract, a list of witnesses, records of partial repayment. One message to the debtor - "reminding you that you were to return X GEL by date Y" - to which the reply is an acknowledgement of the debt.
A written demand
A formal letter: the amount, the basis, a deadline (usually 10-14 days), the consequence - court, the fee, interest and legal costs at the debtor's expense. By post with confirmation of delivery or through a notary. The letter does two jobs: it shows the debtor you are serious, and it records the debtor's refusal for the court.
A payment order
On an undisputed monetary claim the court issues an order without a hearing, at a reduced fee, within a few weeks. The debtor has a period to object; if there is no objection, the order is an enforceable document. If they object, the case moves to ordinary proceedings and the fee difference is paid. For a documented debt this is the cheapest route.
The claim and interim measures
A claim in the court of the debtor's residence, a fee of 3% of the claim value (minimum GEL 100, maximum GEL 3,000). With the claim - a motion for interim measures: attachment of the debtor's accounts and property so that they are not sold while the case runs. A case won without interim measures is often an empty sheet of paper.
Enforcement
After the judgment takes effect, a writ of execution goes to the National Bureau of Enforcement. The Bureau searches for accounts, salary, vehicles and real estate and attaches them; an auction of real estate takes months. The enforcement fee is charged to the debtor, but the creditor pays it in advance.
How long and how much - by stage
Timings for a typical case in Tbilisi; in the regions the court stage is often faster. Costs on the example of a GEL 10,000 debt.
What to bring to the first meeting with a lawyer
- A bank statement with the transfer - date, amount, purpose, recipient's name. For cash - who was present, where and when.
- An IOU, contract or any signed document, even as a photo.
- The full history of correspondence with the debtor - not only the "debt" part: the context proves it was not a gift.
- Records of partial repayment - they are an acknowledgement of the debt and stop the limitation period.
- The debtor's details: full name, personal number (if known), address, employer, known assets, vehicle. The success of enforcement starts here.
- If the debtor is a company - an extract from the registry, the identity of the director and partners, a contract with the company seal.
- Information on other creditors, if you have it: priority matters in enforcement.
Six mistakes that make a debt unrecoverable
Waiting for years
The three-year limitation runs from the due date, not from the day "hope was lost". Every oral "I will repay soon" from the debtor does not stop it - only a written acknowledgement or a payment does.
Threats instead of an IOU
"If you do not repay, I will tell everyone" - this is not debt recovery but grounds for a criminal case against you. Demands only in writing, with facts and a reference to the lawful consequence.
A claim without interim measures
The debtor learns of the claim and "gifts" the car to a brother. A case won and an empty enforcement. Attachment is requested together with the claim; the court decides it within days.
"Saving" a witness for court
A witness who appears for the first time three years later is a weak witness. A witness's written statement or notarised testimony is recorded at the very first stage.
An arrangement without a letter
"I will start repaying in parts" - orally. Two months later, zero again. Any deferral only with a new written schedule, with a clause that the full amount falls due at once if a date is missed.
The wrong defendant
You transferred the money to the director and sued the company - or the other way round. Whoever received it, repays it; exceptions (a company obligation paid through a personal account) require separate proof.
Three years - how it is counted, what stops it and what happens after
- The starting point
- For a loan with a date - the day after the repayment date. For an open-ended loan - the expiry of a reasonable period after the creditor's demand. A debt without a date does not become time-barred on its own - the period starts with your demand.
- Interruption
- An acknowledgement of the debt by the debtor (in writing, by payment, by paying interest, by asking for a deferral) interrupts the period and restarts it. Filing a claim suspends the period until the case ends.
- The consequence
- A time-barred debt does not disappear - it can be repaid voluntarily and cannot then be reclaimed. But the court will no longer award it if the debtor pleads limitation. The court does not apply limitation on its own - the debtor must raise it.
- A contractual date
- The limitation period cannot be changed by contract, but the repayment date can. "On demand" written into the IOU keeps the period in your hands.
Which stages you can do yourself and from where a fee is worth it
The first two stages - gathering evidence and the demand letter - can be done without a lawyer, provided you write down the facts and dates precisely rather than copying a template. With one exception: a letter sent on a lawyer's letterhead has a noticeably different effect on the debtor, and that cost is often recovered by the letter itself.
From the payment order onwards a lawyer is essential - not because the form is complicated, but because a wrongly chosen procedure (an order on a disputed debt, a claim without interim measures, the wrong defendant) loses months and fees. In debt cases lawyers often work for a percentage of the result - then your interest and theirs are the same.
And one practical threshold: for a debt under GEL 1,000 the court route is rarely worth it economically - the demand letter and the payment order are the whole arsenal here. Above 1,000, a free consultation with a lawyer tells you exactly this: whether it is worth it, and if so, from where.
Questions about recovering a debt
I gave the money in cash, with no IOU and no correspondence. Can I do anything?
Yes, but the evidence has to be created first: send the debtor a written reminder with the specific amount and date - a reply in which they do not deny the amount ("I will repay soon", "I do not have it now") is an acknowledgement. Witnesses who were present at the hand-over, or a bank statement proving the origin of the money, reinforce it.
Can I claim interest if none was agreed?
Statutory interest for late payment can be claimed without any agreement - from the due date until full repayment. Agreed loan interest is separate and has a statutory ceiling - interest above the ceiling is reduced by the court.
The debtor has gone abroad. Is the debt lost?
No - the claim is filed at the debtor's last known address, the documents are served officially, and the judgment is enforced against their property and accounts in Georgia. Enforcement abroad is possible but is a separate procedure and must be weighed against the size of the debt.
The debtor transferred the property to their spouse. What can I do?
A transaction made to hide property from a creditor can be challenged and voided if it was made after the debt arose and for no consideration or to a close relative. The deadline and the burden of proof are difficult here - this is a lawyer's job, and the sooner the better while the transaction is recent.
The company did not repay and has started liquidation.
The creditor's claim must be lodged within the period set in the liquidation process - missing it means losing the claim. If the liquidation is being used to avoid the debt, the question of the director's and partners' personal liability arises. In both directions the deadlines are short.
Should I hand the debt to a collector or a lawyer?
A collector buys the debt or takes a percentage and uses only pressure tools, which the law increasingly restricts. A lawyer goes down the court and enforcement route, which delivers results where assets exist. Debt above GEL 5,000 and the debtor has assets - a lawyer; small and no visible assets - a letter first, then decide.
Owed a debt? The first step is free
At a free consultation a lawyer will assess the evidence, check the debtor's assets and tell you which stage to start from - within 15 minutes the coordinator will contact you.