On the 17th November 2023, Av Ian Barbara participated in an interview on the programme “Gimgha b’Gimgha”, whereby he discussed the main principles of debt collection.
Av Barbara explains how there are instances wherein a service is rendered, or goods are sold to third parties, but remain unpaid. Under these circumstances, there are various legal remedies a creditor can utilize to collect his dues, with one of these remedies being the procedure in terms of Article 166A of the Code of Organization and Civil Procedure (Chapter 12 of the Laws of Malta). This procedure gives a creditor the possibility to send a judicial letter to the debtor demanding payment. First, a maximum of €25,000 can be requested under such procedure. If the due amount exceeds €25,000, there are other legal remedies one can avail of. Secondly, the debtor, whether Maltese or foreign, must be present in Malta. The debtor cannot be a minor, nor legally incapacitated. The 166A judicial letter must be sworn under oath by the creditor, this is done on pain of nullity. Additionally, the debtor must be notified either at home or at his place of work. Once the debtor is officially notified, he has 30 days to reply. If the debtor does not respond within 30 days, this letter is converted into an executive title. In this case, the creditor can issue a garnishee order or any other executive warrant to recover his dues. This judicial letter contains a warning informing the debtor that he has a 30-day window to reply from service and that he should seek legal advice from a lawyer. The debtor has the option either to oppose to this demand for payment or he could also admit to such demand and propose a settlement to the creditor in such a way as to avoid unnecessary garnishee orders or any other type of warrants filed against him. Finally, the prescriptive period in relation to overdue payments issued by means of invoices is 5 years from the date of issuance of such invoice.
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