MALTA: Debt Collection in Malta

November, 2019 – Malta – Valletta Legal

In this day and age, unpaid credit is becoming more and more frequent.  Therefore, it is of paramount importance that when approached by clients to carry out debt collection, law firms professionally evaluate the situation and analyse the best and most efficient way forward for the client – whether this is a large company, or an individual who wishes to collect what is owed– thereby determining which is the most convenient course of action to take, with the minimum costs incurred.

In Malta, the debt collection process can be divided into two stages: the ‘Extra-Judicial Stage’ and the ‘Judicial Stage’. This article attempts to cover the salient points of debt collection in Malta.

Extra-Judicial Stage

The normal practice under Maltese Law is that first, there is an attempt by the lawyer at solving the debt collection issue in an extra-judicial manner, where the Debtor agrees to voluntarily pay the debt to the Creditor.  This saves both parties from incurring any unnecessary legal and judicial fees and expenses.

This process is initiated by first sending a legal letter calling upon  the Debtor to pay the debt in question within a number of days and warning  that should he or she remain in default within the time-frame stipulated, legal proceedings would be initiated.  Furthermore, at this stage, the lawyer  would also warn the Debtor that should any legal proceedings be initiated, the right to take out precautionary warrants (which shall be discussed at a later stage in this article) was being reserved in order to safeguard the client’s rights at law.  Subsequently, should the Debtor respond, showing an interest in settling the debt amicably, it is also possible for the said Debtor (either alone or together with sureties) to enter into a settlement agreement whereby the said Debtor may pay the debt in monthly instalments.

If the Debtor is unable to pay the debt immediately, a Constitution of Debt agreement may be signed by both parties, whereby the Debtor acknowledges the amount owed. Although this can be a private agreement, it should ideally be published by  a Notary Public.  It is very useful for this type of agreement to be published by a public Notary for various reasons.  Firstly, a public deed is registered in the Public Registry of  Malta and will show up if any searches are carried out to discover whether  the Debtor has any registered liabilities.  Secondly, the Law stipulates that should the Debtor be in default of the provisions of the Constitution of Debt, said deed would be considered to be an executive Title, once a judicial letter is sent granting the Debtor 3 days to pay, and therefore would have  the same effect as  a judgment .  Therefore, should the Debtor still choose to remain in default of payment and not settle the acknowledged debt during the stipulated time allowed by the Creditor, the latter would then able to start proceedings in order to recuperate the debt in question without having to proceed before  the Courts of Malta. This type of agreement will still be valid if it is signed between the parties, instead of being published by a public notary but will not of course have those advantages granted in the case of a public deed.

Should the above options not be successful, one would have to initiate judicial proceedings. 

Judicial Stage

The number of court cases dealing with debt collection has drastically decreased throughout the years, with such a statistic mainly attributable to the use of Judicial Letters, which is a tool that has proven to be useful due to its efficiency and cost effectiveness in ensuring the settlement of  a debt.

The Code of Organisation and Civil Procedure (COCP), Chapter 12 of the Laws of Malta, was amended in 2006 and introduced  a new procedure in order to avoid costly and lengthy litigation. Article 166A of this Code provides that where a debt is certain, liquid and due and does not exceed the sum of €25,000, then the Creditor of the said debt is able to file the said Judicial Letter before the civil courts, claiming that the amount is due and confirming the claim under oath.  If the Debtor does not oppose the debt within thirty days from its notification, the said Letter becomes an Executive Title and therefore, as explained above when dealing with Constitution of Debt agreements, will have the same effect as a court judgment and the Creditor may proceed to recover what is claimed in the said Letter as though  a judgment has been obtained , and may file executive warrants in order to collect what is due together with interest and costs. A similar procedure also exists in the case of bills of exchange which are not honoured.

While the above described system has helped to reduce the number of new cases initiated before the Courts of Malta, a problem still arises when it is impossible to notify the Debtor with the letter.  Unfortunately, in such case little can be done, and if after various attempts at trying to notify the party concerned  proves to be fruitless, then an alternative legal route must be used and the creditor has no other option but to institute legal action.

The procedure in filing court proceedings follows broadly the following lines:

Said alternative legal route would be to initiate a lawsuit before the Law Courts, whereby a Creditor would seek to obtain judicial confirmation by means of a judgment that the  debt is due. In Malta, an application to recover a debt is filed in the following manners:

  • Where the amount due does not exceed €5,000 – said application is filed before the Small Claims Tribunal, presided over by an Arbiter;
  • Where the amount is more than €5,000 but does not exceed €15,000 – said application is filed before the Court of Magistrates, presided over by a Magistrate; and
  • Where the amount is more than €15,000 ORwhere the amount is not certain and liquid but is calculated to exceed €15,000 – said application is to be filed before the First Hall Civil Court, as presided over by a Judge. Special summary proceedings are also possible before the First Hall Civil Court if the Creditor claims that the debt is certain liquid and due and that the Debtor has no valid defence at law and if the Debtor is unable to convince the Court otherwise, judgment is given at the first hearing.

Once the application is filed, a sitting is appointed and the process to notify the Debtor is initiated.  The Debtor is normally given between 18 and 20 days from notification in order  to file a reply, depending on the procedure adopted.  Should the Debtor fail to file a reply within the timeframe permitted by law, he or she will not be allowed to provide any evidence during the course of the lawsuit and will only be allowed to file a final note of submissions before the lawsuit is put off for judgment. On the other hand, if the Debtor files the reply, both parties are allowed to produce evidence and the Creditor’s claims are decided on the basis of probabilities.  Following this process, the adjudicating body will then move on to pass judgment.

Once a Creditor obtains a definitive judgment this becomes an Executive Title, and can be registered in the Public Registry of Malta, whilst executive warrants may also be issued in order to collect what is owed together with judicial costs and interest. The judicial costs are calculated by the court officials and a taxed bill of costs is issued in relation to each and every judgment, with the quantum depending on the amount being claimed.

Enforcing the Debt – Precautionary and Executive Warrants

In order to secure one’s claim, it is possible to file warrants in Court. Warrants can either be precautionary, when they are taken out by the creditor before judgment is given on the strength of the oath taken by Creditor confirming that the debt is due. This is a very effective tool and may lead to the early settlement of the lawsuit. Once the debt is confirmed by a judgment, no oath is necessary and an executive warrant may be taken out without any extra formality. If a precautionary warrant would have already been issued, it is converted into an executive one, once a definitive judgment is given.

The two most popular warrants in Malta that a Creditor may file (are what are known as the Garnishee Order (Mandat ta’ Sekwestru) and the Warrant of Seizure (Mandat ta’ Qbid).  These can serve both as precautionary warrants, therefore enabling them to be filed pending proceedings, as well as executive warrants following the attainment of an Executive Title and a precautionary warrant can also be filed in the case together with the judicial letter, filed in terms of Article 166A of the COCP, as explained above..

In practice, the Garnishee Order is used by the Creditor to ask the Court to order any person indicated the warrant not to hand over any assets held which belong to the Debtor but to deposit the assets in Court instead. In practice this warrant is typically issued ordering local banks to freeze the bank account/s of the Debtor for the amount due, and ordering them to deposit the funds in Court within nineteen days of being notified.  Once the Creditor obtains an executive title, an application is filed in Court for the release of the funds deposited, in satisfaction of the amount due, together with costs and interest, if due.

On the other hand, the Warrant of Seizure consists of the seizure of an asset belonging to the Debtor, which is brought under court authority, with the object of selling the same by judicial auction once an Executive Title is obtained. The proceeds then go towards the satisfaction of the amount due, costs and interest. In the case of a precautionary warrant of seizure, the Creditor may only seize items of a movable nature, while both movables and immovables may be seized by virtue of an executive warrant of seizure.

If the amount due exceeds €11,647 and the Creditor is aware that the Debtor owns immovable property, a warrant of prohibitory injunction may also be filed in order to stop its sale and secure the amount due.


For more information on the above or in other matters, please contact Tanya Sciberras Camilleri LL.D. ( or Natassja Gouder LL.D. ( This article is based on publicly available information only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.