By AZE.US
Azerbaijani borrowers who fail to repay a court-ordered credit debt may have up to 50% of their salary, pension or other qualifying income withheld through enforcement proceedings.
Debtors are generally given up to 10 days to pay the full amount voluntarily after enforcement proceedings begin, lawyer Akram Hasanov told Demokrat.az.
If the debt is fully paid within that period, the court order is considered voluntarily executed and no additional enforcement fee is charged.
If the borrower cannot repay the entire debt within 10 days, compulsory enforcement measures may begin. These can include claims against the debtor’s property, bank accounts, salary, pension and other income.
How Much Can Be Withheld?
Under Article 65 of Azerbaijan’s Law on Enforcement, deductions from a debtor’s salary and equivalent income generally cannot exceed 50%.
Even if several enforcement orders have been issued against the same person, at least half of the debtor’s earnings must remain available to them. The same limit applies to pensions, stipends and certain royalty payments.
The 50% ceiling also applies to ordinary bank loan debts.
A higher limit of 70% is permitted only for certain obligations, including alimony, compensation for personal injury, payments related to the loss of a family provider and damages caused by a crime. These exceptions do not normally apply to standard bank credit debt, according to guidance published by Azerbaijan’s Ministry of Justice.
Salary garnishment may be used when the debtor has no property that can cover the claim or when the available property is insufficient to repay the full amount.
Unpaid Debt Can Increase by 10%
If a debtor fails to comply without a valid reason during the voluntary payment period, a state enforcement officer may impose an additional enforcement fee equal to 10% of the unpaid balance.
If the borrower pays part of the debt during the 10-day period, the fee is calculated only on the remaining amount.
When a debt is repaid in installments, the enforcement fee may also be collected gradually in proportion to each payment.
How Long Can Salary Deductions Continue?
Azerbaijani law does not establish a single deadline by which a credit debt must be fully recovered. Salary deductions can continue for one, two or three years – or longer – depending on the size of the debt, the borrower’s income and the amount withheld each month.
The two-month period mentioned in enforcement legislation does not require the borrower to clear the debt within two months. It refers to the period in which the enforcement officer must carry out the necessary enforcement actions after receiving the relevant document.
A debtor seeking a formal payment extension or installment plan may apply to the court that handled the case. The court can consider the person’s financial position and other circumstances when deciding whether to approve a different payment schedule.
The 10-day notice therefore does not mean that a borrower who lacks the full amount must immediately produce it. However, once the voluntary payment period expires, compulsory measures may begin, up to half of the debtor’s income may be withheld, and the remaining balance may increase because of the 10% enforcement fee.
AZE.US