In an unstable economy, non-payment issues from counterparties often put businesses in difficult positions. Kazakhstani legislation provides creditors with three main collection tools: pre-trial demand, notary's writ of execution, and litigation.
Pre-trial Demand – The First Step to Debt Recovery
A pre-trial demand is a written requirement for obligation fulfillment. For many commercial dispute categories, submitting a demand is mandatory before court proceedings. Additionally, sending a demand interrupts the statute of limitations and establishes the moment when penalties and interest begin accruing.
An effective demand should contain complete party details, obligation basis, debt amount, penalty calculation, and deadline for voluntary compliance. Use registered mail with notification or personal delivery with receipt confirmation to prove the debtor received the demand.
Notary's Writ of Execution – Fast Track to Collection
A writ of execution is a notary's order for debt collection having the force of an enforcement document. The main advantage is speed of obtaining (three working days) and low cost compared to court proceedings.
According to Article 92-1 of Kazakhstan's Notary Law, writs of execution apply when obligations under notarized transactions, written debt acknowledgment agreements, utility debts, rent payments, lease agreements, and other legally specified cases are unfulfilled.
To obtain a writ of execution, creditors must send written obligation fulfillment demands to debtors 30 days prior. Then the notary receives the contract, debt calculation, and proof of demand delivery. The notary verifies undisputed debt and executes the writ. If debtors don't object within 10 working days, the writ goes to bailiffs for enforcement.
Litigation – Reliable Path to Collection
General court proceedings represent classic litigation with full procedural cycles. While requiring more time, this collection method provides the most complete legal protection of creditor interests.
The procedure begins with filing claims in courts at defendant locations. Claims must include supporting documents: contracts, work completion certificates, invoices, party correspondence, and demand delivery proof. State duty payment is also required: 3% of claim amount for legal entities and 1% for individuals.
Claim consideration takes up to 2 months from acceptance. During proceedings, courts conduct preliminary hearings to determine case-relevant circumstances and distribute burden of proof. Then main hearings examine evidence, hear parties, and render decisions.
Applying interim measures is critically important for successful collection, guaranteeing future decision enforceability. Such measures include debtor property and bank account seizure, prohibiting specific actions, and preventing registration authorities from registering debtor property transactions. Claim security motions are considered by courts on receipt days without defendant notification, enabling rapid blocking of debtor asset concealment attempts.
Special attention should be paid to evidence. Even obvious creditor debts must be confirmed by proper documentation. Properly executed contracts, goods delivery or work completion documents, and payment documents are paramount. It's also important to present pre-trial procedure compliance evidence – demands with debtor receipt confirmation.
After positive decisions, await legal force entry (one month from final form preparation if not appealed). If appealed, appellate courts must review complaints and uphold decisions. Then courts issue writs of execution serving as enforcement bases. Writs must be presented to bailiffs within 3 years.
When choosing between state and private bailiffs, consider that private bailiffs usually act more rapidly, have lighter caseloads, and are materially interested in actual collection (their compensation is a percentage of collected amounts). Enforcement measures include debtor property seizure and sale, wage and income garnishment, foreign travel restrictions, and license/permit suspensions.
Choosing Optimal Strategy
Effective debt collection requires comprehensive approaches. Start by assessing debtor solvency and analyzing evidence. Send pre-trial demands and attempt peaceful dispute resolution.
If debtors don't respond, choose optimal enforcement methods: for undisputed debts – notary writs of execution; for requirements meeting summary procedure criteria – court orders; otherwise – claims.
To ensure decision enforceability, apply interim measures and actively participate in enforcement proceedings by providing debtor property information.
When choosing strategies, consider debt amounts, evidence bases, debtor financial positions, and urgency of fund receipt. In complex cases, the optimal solution is consulting professional lawyers specializing in debt collection.
Gabitzhan Kudaibergen, Managing Partner at GK and Partners
