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Unpaid debt recovery in Georgia can be carried out through three main avenues. First—simplified proceedings directly through the National Bureau of Enforcement without court involvement, with an application fee of 200 GEL; the debtor has 10 calendar days to respond, and failure to respond results in an order for payment of the debt in the full amount requested. Second—enforcement based on a notarial act or a pledge certificate, which requires no court involvement at all. Third—court litigation followed by a writ of execution. In all three cases, the 7% enforcement fee is borne by the debtor, while the creditor pays only an advance fee, which is refunded in proportion to the recovered amount.

Most businesses divide unpaid invoices into two categories: those for which "we are still waiting," and those that "we wrote off." The intermediate legal avenue is often overlooked entirely because it is assumed to mean going to court, and court is assumed to mean years and heavy expenses.

This assumption is partially flawed. Georgian legislation offers creditors several mechanisms, two of which bypass the courts entirely, and one of which operates with a fixed, relatively low initial cost.

This article is intended for creditors: entrepreneurs whose counterparties failed to pay, landlords, suppliers, and lenders. If you are on the debtor's side and need information regarding asset attachments, bank account freezes, or appeals, please refer to our separate material on asset attachments and debtor rights.

 

Three Avenues: Which One Should You Use and When?

 

Before diving into details, it is worth looking at the full picture. The choice depends on what document you hold and whether the debtor disputes the claim.

• Simplified Proceedings: The prerequisite is a documentarily supported, overdue monetary claim. The timeframe is approximately one month if the debtor does not dispute it. The initial cost is 200 GEL.

• Notarial Act or Pledge Certificate: The prerequisite is an act executed at the time of signing the contract. Enforcement begins immediately. The initial cost is solely the advance enforcement fee.

• Court Proceedings: The prerequisite is a lawsuit. The process takes between 3 months and 1 year. Initial costs include state court fees and legal representation fees.

Simplified proceedings are the primary choice for undisputed debts. Court litigation remains reserved for cases where the debtor raises a protest or where the claim depends on a counter-performance.

 

Simplified Proceedings: The Least Known Tool

 

Chapter XVI¹ of the Law of Georgia "On Enforcement Proceedings" regulates simplified proceedings regarding claims for the payment of monetary debts. This is a quasi-judicial procedure conducted directly by the National Bureau of Enforcement.

 

Who Can Apply?

 

The parties to simplified proceedings are the applicant and the respondent. The applicant is a person holding a documentarily supported, overdue monetary claim who submits an application to the Bureau. The respondent is the party against whom the claim is directed.

Joint participation (multiple creditors or multiple debtors) as well as representation are permitted.

 

Two Cases When This Avenue Is Closed

 

The law establishes two clear restrictions:

1. Simplified proceedings are not allowed if the assertion of the claim depends on a yet unfulfilled counter-obligation. In other words, if you have not yet delivered the goods or completed the work, this method will not work.

2. If the contract provides for dispute resolution via arbitration. Note: Other types of alternatives do not close off this route; the law explicitly states that simplified proceedings are allowed even if parties specified different dispute resolution rules in the contract, except for arbitration.

This second point holds practical importance during the contract drafting stage: inserting an arbitration clause automatically excludes the fastest and cheapest recovery path.

 

What Must the Application Contain?

 

An application for debt collection must contain:

• Names, personal/identification numbers, addresses, and other known contact details of the parties and representatives;

• The applicant's bank details;

• The applicant's claim;

• A list of documents supporting the claim;

• An indication of whether the applicant seeks reimbursement of additional costs (application and attachment fees);

• An indication that the claim does not depend on a counter-obligation, or that such obligation has already been fulfilled;

• An indication of whether the applicant requests enforcement of the order;

• An indication of whether the applicant requests an attachment as an interim relief measure;

• Signature.

Evidence must be submitted in the form of originals and/or certified copies.

Here lies a critical detail: when verifying the applicant's right of claim, the Bureau relies solely on the application and attached written evidence. Oral explanations, witnesses, or subsequent additions do not exist in this procedure. Therefore, the quality of the application directly dictates the outcome.

 

Timeframes: The Entire Process in One Month

 

The temporal roadmap of the procedure is as follows:

• 5 working days — From application registration, the Bureau checks formal and substantive compliance and is authorized to issue a defect notice.

• Up to 10 calendar days — Period allowed to rectify defect notice, if the nature of the defect permits correction.

• 5 working days — Within this period, the Bureau notifies the respondent of the initiation of simplified proceedings against them.

• 10 calendar days — Respondent’s response period upon receiving notification.

In an ideal scenario without defects, the creditor will hold an enforceable document in hand within approximately one month.

 

Respondent's Five Possible Reactions and Their Outcomes

 

After receiving notice, the respondent has 10 days. Their behavior determines the outcome:

• If they do nothing, a debt payment order is issued for the full amount of the claim.

• If they fully admit the claim, a payment order is issued for the full amount.

• If they admit part of the claim, a payment order is issued only for the admitted portion; the remainder is rejected.

• If they pay part of the debt, a decision refusing to issue a payment order is issued regarding the remaining balance.

• If they file a written protest, issuance of a payment order for the full amount is refused.

The first outcome is the most important: inactivity is the worst strategy for a respondent. If they do nothing, an order is issued for the entire sum.

The last outcome is unfavorable for the creditor because a simple written protest blocks this route. The Bureau does not review substantive disputes; that is the court's function.

A refusal to issue an order does not deprive the applicant of the right to file a lawsuit in court under standard procedures. Thus, simplified proceedings are a risk-free attempt—a bad outcome simply means going to court, just as before starting the procedure.

 

Settlement as the Best Outcome

 

The respondent has the right to submit a settlement proposal within the same 10 days—meaning when they acknowledge the debt (or part of it) but request an extension or installment plan.

The Bureau sends this statement to the applicant and sets a deadline for consent or refusal. Upon the applicant's request, this period can be extended by no more than 30 days. During this period, the parties may agree on entirely different amounts and terms. The agreement is drafted in writing, and the Bureau approves the settlement terms.

Two details make this tool particularly valuable:

1. First: If the respondent violates the settlement terms, the Bureau issues an order for the unpaid amount upon the applicant's request. Thus, settlement does not weaken the creditor's position—they retain enforcement leverage.

2. Second: If the respondent properly fulfills the settlement terms, the advance enforcement fee deposited as guarantee money is fully refunded to the applicant.

From a business logic perspective, this is often better than forced enforcement: cash flows in, commercial relationships are preserved, and costs are refunded.

 

Attachment as an Interim Relief Measure

 

The applicant can request an attachment (seizure) on the respondent's property even before the order is issued. The Bureau will execute this when four conditions are met simultaneously:

• The applicant requests attachment as an interim relief measure;

• The applicant requests enforcement of the order and has paid the guarantee amount in the size of the advance enforcement fee;

• The applicant explicitly specifies which property of the respondent should be targeted;

• The attachment fee is paid.

The third condition most frequently blocks this tool in practice: the Bureau does not search for property on its own at this stage. The creditor must know what assets the debtor holds and provide identification details. Hence our practical recommendation: the Public Registry search should be conducted before submitting the application, not after.

For balance, the law includes a counterweight: the applicant is liable for damages caused to the respondent if the interim attachment proves unjustified. This is not a formal clause—an excessive or unfounded attachment serves as grounds for a counterclaim against the creditor.

 

Fee Structure

 

• Application fee: 200 GEL per claim submitted under a single legal basis. Paid by the applicant.

• Property attachment: 100 GEL per asset/item. Paid by the applicant.

• Simplified proceedings fee: 2% of the claim amount. Paid by the respondent upon settling the debt.

• Advance enforcement fee: Deposited as guarantee money; paid by the applicant and refunded proportionally to recovered amounts.

In joint obligations, if the claim is submitted by more than one applicant or directed against more than one respondent, the application fee is 200 GEL per person.

The simplified proceedings fee is paid by the respondent when covering the debt or part of it. Settlement occurs through the Bureau: the Bureau transfers funds deposited by the respondent to the applicant's account after deducting fees, and the date the respondent deposits funds into the Bureau's account is considered the payment date for the applicant.

 

Withdrawal of Application

 

The applicant has the right to withdraw the application before an order is issued, before a refusal decision is made, or before settlement terms are approved.

The rule for refunding guarantee money is asymmetrical and time-dependent:

• Before notice is served to the respondent: Guarantee money is fully refunded;

• After notice is served: Half is refunded.

The attachment fee is refunded if attachment registration in the registry authority has not taken place by that time.

 

Force and Validity of the Order

 

A debt payment order enters into force on the day of its issuance. It is immediately referred for enforcement if the applicant requests enforcement and deposits the advance fee as guarantee money.

If the applicant does not request immediate enforcement, the order is handed over to them upon request, and the limitation period for submitting it for enforcement is 5 years from issuance.

Appeals are allowed only if the procedure of simplified proceedings was substantially violated. Meaning the order cannot be appealed on substantive grounds regarding the existence of the debt, which is logical since the respondent already had the opportunity to protest.

 

Second Avenue: Notarial Act and Pledge Certificate

 

Article 2 of the Law directly lists notarial acts and pledge certificates among acts subject to execution.

Furthermore, under Article 20, enforcement proceedings are not permitted without a writ of execution, except for listed exceptions, which include the pledge certificate specified in Article 258¹ of the Civil Code and the debt payment order.

The practical conclusion is simple and applies to the contracting stage: if you execute a contract notarially, you acquire the right to direct enforcement in advance without court. This single decision on signing day saves months or years if the debtor stops paying.

 

Enforcement Stage: What Happens Before Actual Cash Recovery?

 

Suppose you hold an enforceable document. The next step is the National Bureau of Enforcement.

 

Proposal to the Debtor

 

Within 5 days from the initiation of enforcement, the enforcement officer sends a proposal to the debtor to voluntarily fulfill the demand within 7 days. This period is critical for the creditor as well: actual payment frequently occurs at this stage, as the fee rate for the debtor drops from 7% to 2%, and placement on the Debtor Registry is avoided.

 

Asset Discovery: Leverage of Article 17

 

This is the stage where state apparatus works in favor of the creditor.

Pursuant to Article 17, all administrative bodies, banking institutions, and physical or legal entities in contractual relations with the debtor are obliged upon the Bureau's request to provide information regarding the debtor's asset status, income, bank accounts, account balances, and monetary turnover.

In practice, the enforcement officer requests information from the Ministry of Internal Affairs, Public Registry, Business Registry, Revenue Service, and all registered banking institutions in Georgia.

Additionally, under Article 42, the enforcement officer may compel the debtor to submit an asset inventory within 5 days. Failure to submit or submitting an incomplete inventory serves as grounds for liability.

This information resource is independently inaccessible to a private creditor, and this is precisely the primary value of the enforcement stage.

 

Debtor Registry as a Leverage Instrument

 

After the expiry of the voluntary performance deadline without result, the debtor is listed in the Registry of Debtors (Article 19¹).

The registry is public, and inclusion restricts property transactions until removal. For a business debtor, this is often heavier than the debt sum itself, as notary and registration operations are blocked, banking relations break down, and reputation among counterparties suffers.

For the creditor, this means that the prospect of registry inclusion is a negotiation argument in itself, often more effective than the threat of asset attachment.

 

Enforcement Fees: Who Pays What?

 

This part often unnecessarily frightens creditors due to misunderstandings.

Payment of the enforcement fee is borne by the debtor. On monetary collection cases, the fee is collected together with the enforced claim and amounts to 7% of the claim.

The creditor's role is limited to the advance fee paid when submitting the writ of execution, which is subsequently refunded proportional to the recovered claim. Thus, this is not an expense, but a temporary deposit.

The advance fee rate decreases as claim size increases, the larger the claim, the lower the percentage rate. For individual creditors (excluding sole proprietors), a maximum cap applies. Specific rates are set by order of the Minister of Justice and periodically updated, making rate verification prior to payment essential.

Of special note: if during simplified proceedings the applicant fully deposited the advance fee as guarantee money, it is credited as paid when initiating enforcement proceedings. Double payment does not occur.

 

Private Enforcement Officers and the 500,000 GEL Threshold

 

Besides the Bureau, enforcement can be carried out by a private enforcement officer, a licensed physical person operating across Georgia.

There are two restrictions:

1. Parties must be physical persons and/or private law legal entities;

2. The monetary claim to be enforced must not exceed 500,000 GEL.

A private enforcement officer carries out enforcement based on an application and contract with the creditor; remuneration is determined by party agreement. Remuneration paid by the creditor is charged to the debtor and collected alongside the claim, up to the maximum enforcement fee cap set under Article 38.

Comparing the two institutions: the Bureau is standardized and cheaper, while a private officer is result-motivated since compensation depends on contractual success. For medium-sized commercial claims, this often yields faster results.

 

Why Creditors Fail to Recover Funds: Five Real Reasons

 

Experience shows that unsuccessful enforcement usually stems from the same five categories:

1. The debtor has no assets (or formally has none). Enforcement is a mechanism, not a guarantee; if property does not exist or was transferred beforehand, no procedure can pull money out of thin air.

2. Delay. The more time passes, the fewer assets remain. A debtor who does not pay you usually does not pay others; the first creditor to act secures priority.

3. Weak documentation. In simplified proceedings, the Bureau relies exclusively on written evidence. Oral agreements, informal messages, or unsigned invoices are useless in this procedure.

4. Arbitration clause in the contract. As noted above, it directly blocks simplified proceedings.

5. Priority ranking. If the debtor's property is already pledged or mortgaged to someone else, an unsecured creditor stands back in line. This is why securing claims is a contract-stage issue, not an enforcement-stage issue.

 

How to Structure Contracts for Easy Recovery?

 

The most valuable legal action in debt collection occurs not when the debt arises, but on the day the contract is signed. Here are five practical solutions to the problem:

• Notarial form. A notarial act is an enforceable document. The cost at signing is minimal; saved litigation time is measured in months.

• Conscious use of arbitration clauses. Arbitration has benefits, but it locks out simplified proceedings. This choice should be deliberate, not blindly copied from templates.

• Pledge or mortgage. A secured creditor stands first in line, and the logic of the Registry of Debtors works differently in their favor.

• Clear definition of payment terms. Simplified proceedings require an overdue claim. "Payment upon completion" is vague and complicates proving overdue status.

• Documentary closing of counter-performance. An acceptance act confirming your performance is a direct prerequisite for simplified proceedings.

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Frequently Asked Questions

 

• Can I recover debt without going to court? Yes. Simplified proceedings at the National Bureau of Enforcement, as well as enforcement of a notarial act or pledge certificate, do not require a court ruling.

• What happens if the debtor simply does not respond? If the respondent does not pay, admit, protest, or propose a settlement within 10 calendar days of receiving notice, a payment order is issued for the full amount.

• How much does it cost to initiate simplified proceedings? The application fee is 200 GEL per claim submitted under one legal basis. Property attachment costs 100 GEL per item. The simplified proceedings fee itself (2% of the claim) is paid by the respondent upon debt clearance.

• How long is a debt payment order valid? The order enters into force on the date of issuance, and the deadline for submitting it for enforcement is 5 years from issuance.

• Who pays the enforcement fee? The debtor. The creditor pays only an advance fee, which is refunded in proportion to recovered amounts.

• What happens if the debtor files a protest? The Bureau issues a decision refusing the payment order. This does not deprive the creditor of the right to file a standard lawsuit in court.

• Can I attach debtor property before the order is issued? Yes, as an interim relief measure. However, you must explicitly identify the specific property and its registration parameters, pay the required fee, and request immediate enforcement.

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Conclusion

 

Debt recovery in Georgia does not automatically mean going to court. For undisputed, documentarily verified claims, simplified proceedings offer an enforceable document for 200 GEL in about a month. Even if the debtor protests, the creditor remains in the exact same position as before initiating the procedure.

The decisive variable is time. The earlier the process begins, the more assets remain, the higher you stand in line ahead of other creditors, and the greater the probability of actual recovery.

L&L Consulting provides end-to-end management of accounts receivable, documentary preparation of claims, initiation of simplified proceedings, requests for interim relief measures, execution management, and preventative contract structuring.

To schedule a consultation, contact us →

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Author: Zurab Loria — Attorney-at-Law, Managing Partner at L&L Consulting.