Debt collection in Bahrain is regulated by several laws, which provide for the manner in which consumer and commercial debts can be recovered. Below, we invite you to discover what this process entails and how our lawyers in Bahrain can help you.
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The debt recovery procedures available in Bahrain
There are two methods to recover debts in Bahrain:
- the amicable (out-of-court) one;
- the court procedure.
You cannot take a case to court without trying to reach an understanding with the debtor first, so the first procedure is mandatory. This is why there are several out-of-court stages to complete before being heard by a judge.
You can ask for support from our Bahraini lawyers if you need assistance in either stage of the debt collection process.
Amicable debt collection in Bahrain
This is the first step in recovering any outstanding amount of money in Bahrain. Also known as pre-litigation, this procedure usually involves for the creditor to try to get the debtor to pay through a mutual understanding. For this purpose, the first party must make sure the second one knows about the debt by sending him/her/it dunning letters.
Failing to respond to these letters will enable the creditor to file for debt recovery in court.
In the case of commercial debts, you can discuss with our Bahraini lawyers and accountants to understand the potential issues that may lead to financial difficulties.
Court proceedings for debt recovery in Bahrain
Should the amicable procedure fails, the creditor has the right to seek other means to recover an outstanding amount of money. In this situation, litigation is the common course of action.
Court debt collection in Bahrain implies:
- filing a claim with the competent court where the amount of money and the legal basis for recovery are stated;
- waiting for the response of the defendant (the debtor);
- the trial, if the parties do not reach an agreement.
It is possible for the parties to settle a debt even during court proceedings. If they do not, the judge will issue a ruling on how the money will be collected.
Debt collection regulations in Bahrain
There are two types of debtors in Bahrain – natural persons and companies – which is why the laws covering the recovery procedures are several. Specifically, to initiate and conduct such a process, the following rules must be followed:
- the Islamic Law (Sharia), considering this is an Arab country;
- the Civil Code, applicable to consumer debts;
- the Commercial Code, applicable to business debts;
- the Bahraini Constitution.
Apart from these, Bahrain is also a member of various international agreements which enable local and foreign creditors to chase debts abroad, respectively, in Bahrain.
Legal support in debt recovery in Bahrain
When seeking to recover money from debtors, creditors can use the services of specialized agents or lawyers, including ours. However, when using the first option, only agencies accredited by the Central Bank are accepted by law.
If you want to avoid the process of seeking approved agencies, you can rely on our lawyers in Bahrain directly.
How long do debt recovery procedures take in Bahrain?
Here is a timeline of court proceedings in debt collection:
- The hearing is established within a week from filing the claim, leaving the defendant 3 days to submit the defence;
- If the case is tried by the Court of Minor Causes, the parties will be heard within the following 8 days;
- In the case of appeals, the cases are tried in 15 days;
- Judgments are issued within 6 months.
You can rely on us if you need assistance in various matters. While our lawyers can also help with immigration and obtaining residency in Bahrain, our company registration agents can assist you set up a company in Bahrain.
Contact us and find out how we can help you!