Debt collection is an important part of business operations, especially in developing markets where contractual discipline is still being strengthened. Uzbekistan, with its rapidly growing economy and active foreign investment climate, is no exception. Both local and international companies often face the challenge of overdue payments from partners or customers. Understanding the legal framework and practical options for recovering debts is essential for effective risk management.

Legal Framework for Debt Recovery

In Uzbekistan, debt collection is primarily governed by the Civil Code, which regulates obligations and contracts. When a debtor fails to fulfill financial obligations, the creditor has the right to initiate recovery either through negotiations, mediation, or litigation. Court proceedings are the most common way to enforce debt recovery if an amicable settlement cannot be reached.

The Economic Court of Uzbekistan handles disputes between legal entities, while the Civil Courts resolve cases involving individuals. The creditor must provide documentary evidence of the debt, such as a signed contract, invoices, delivery notes, or other proof of obligations. Court judgments, once finalized, can be enforced through the Bailiff Service, which has the authority to seize assets, freeze bank accounts, or garnish wages.

Role of Debt Collection Agencies

Apart from litigation, many companies choose to engage a debt collection agency in Uzbekistan. These agencies specialize in pre-trial negotiations, legal support, and enforcement assistance. Their role is particularly useful for foreign investors who may not be familiar with local laws and procedures. Debt collection agencies usually operate under strict compliance rules and employ experienced lawyers who can represent the creditor’s interests in court or out of court.

Engaging an agency also helps maintain the business relationship with the debtor. Since professional collectors act as intermediaries, negotiations can often be conducted more diplomatically, reducing reputational risks for the creditor.

Practical Steps in Debt Collection

1. Pre-trial Settlement
   The first stage usually involves sending a written demand for payment. This document sets out the details of the debt, deadlines, and consequences of non-payment. Uzbek law requires that before filing a claim in court, the creditor provides evidence of an attempt to settle the dispute out of court.
2. Court Proceedings
   If negotiations fail, the creditor can file a lawsuit. The process involves preparing a claim, submitting supporting evidence, and paying a state duty. Court hearings in Uzbekistan can take several months, depending on the complexity of the case and the debtor’s behavior.
3. Enforcement of Court Decisions
   Winning a court case does not automatically guarantee payment. Enforcement is carried out by bailiffs, who can apply various measures such as asset seizure or restrictions on business activity. In some cases, the debtor may attempt to hide assets, which makes professional legal assistance crucial.
4. Alternative Dispute Resolution (ADR)
   Mediation and arbitration are gaining popularity in Uzbekistan. Arbitration courts, including international ones, may be an effective way to resolve cross-border debt issues, provided both parties agreed to arbitration in their contracts.

Challenges in Debt Collection

While the legal system in Uzbekistan is improving, creditors may still face challenges such as:

• Delays in court proceedings;
• Difficulty in locating debtor’s assets;
• Resistance from debtors who exploit procedural loopholes.

This is why relying on a specialized debt collection agency in Uzbekistan can significantly increase the chances of success. Agencies not only understand local regulations but also have practical experience in dealing with enforcement authorities.

Conclusion

Debt collection in Uzbekistan requires a strategic approach that combines legal knowledge, negotiation skills, and practical enforcement measures. Creditors should always begin with an attempt at amicable settlement, but also be prepared to pursue litigation if necessary. Partnering with a professional debt collection agency in Uzbekistan can help businesses navigate the system more effectively, saving time and resources while ensuring that financial obligations are met.