Recovering a debt or loan: what to do under Georgian law

What to do

1. Evidence: a loan may be oral, but it cannot be proved by witness testimony alone (Civil Code of Georgia, Art. 624). You need a receipt (ხელწერილი), a bank transfer, or correspondence acknowledging the debt. If the debt is not a loan (supply, services), the same steps apply.
2. Limitation first: the limitation period for contractual claims is 3 years (Civil Code, Art. 129). It runs from when the creditor learned or should have learned of the breach (Civil Code, Art. 130). Acknowledgement of the debt (partial payment, interest, guarantee) interrupts the limitation period, and it starts again (Civil Code, Art. 137). After the limitation period expires, the debtor may refuse to pay (Civil Code, Art. 144).
3. Repayment term: if no repayment date is set, the debt falls due when the contract is terminated, and the termination period is 3 months (Civil Code, Art. 626). Delay means non-performance on time, or after the due date and the creditor's reminder (Civil Code, Art. 400). Therefore always send a written demand with a calculation and a deadline.
4. Beyond the principal: for late payment of a monetary debt, the agreed interest applies. Interest on interest is allowed only if expressly stated in the contract (Civil Code, Art. 403). Caps on loans: the annual effective rate on any loan may not exceed 50% (Civil Code, Art. 625); penalties and other sanctions may not exceed 0.27% of the outstanding principal per day (Civil Code, Art. 625); all sanctions for a single delay combined may not exceed 1.5 times the outstanding principal (Civil Code, Art. 625). A manifestly excessive penalty may be reduced by the court (Civil Code, Art. 420).
5. Procedure: a claim for up to GEL 5,000 goes to the magistrate court (Civil Procedure Code of Georgia, Art. 14). The state duty is 3% of the claim amount, minimum GEL 100 (Civil Procedure Code, Art. 39). Add an interim measure securing the claim (seizure of property or accounts) if enforcement of the judgment would otherwise become difficult or impossible (Civil Procedure Code, Art. 191). In an urgent case it may be requested before filing the claim, but then the claim must be filed within 10 days of the ruling (Civil Procedure Code, Art. 192). For a notarised loan, the notary issues an enforcement writ at the creditor's application, without a court (Law of Georgia on Notaries, Art. 40).
6. Enforcement: compulsory enforcement is carried out by the National Bureau of Enforcement (Law of Georgia on Enforcement Proceedings, Art. 3). A claim under a judgment that has entered into force has a limitation period of 10 years (Civil Code, Art. 142).
7. Where to apply: district (city) court or magistrate court; notary; National Bureau of Enforcement (NBE).
8. Evidence: receipt (ხელწერილი) or contract, transfer statements, correspondence acknowledging the debt, confirmations of partial payments, demand with proof of delivery, information on the debtor's property (registry extract).
9. Pitfalls: missing the limitation period; failing to account for an acknowledgement of the debt or a partial payment; an oral loan with no transfer trail; filing without security while the debtor moves assets out; calculations beyond the lawful caps, which the court will reduce.

Be sure to check

• evidence of the debt (receipt, transfer, correspondence; witnesses alone are not enough)
• limitation period of 3 years, when it starts, and its interruption by acknowledgement of the debt
• calculation: principal plus interest and penalties within the lawful caps
• procedure: written demand → claim with security (seizure) → National Bureau of Enforcement