Recovering a debt in Cyprus: demand letter, court claim and limitation
Whether you are a business with unpaid invoices, a landlord owed rent, or a private person who lent money to a friend, recovering a debt in Cyprus follows a clear path: a written demand, if necessary a claim at the District Court under the Civil Procedure Rules 2023, a judgment and enforcement under the Civil Procedure Law, Cap. 6. The most important legal limit is time. Under the Limitation of Actionable Rights Law of 2012 (Law 66(I)/2012), contract claims become time-barred six years after the cause of action arose, claims for the fees of professionals such as contractors, architects, lawyers and doctors after three years, and claims with no special period after ten years. Limitation can be interrupted: under section 17, the period starts afresh if the debtor acknowledges the debt in writing, if the debtor pays more than 50% of the total debt including interest, or when you file a court claim. This guide explains how to prepare the evidence, calculate the claim and interest, send an effective demand, choose between negotiation, mediation and court, file a claim, and turn a judgment into money. It also covers what to do if the debtor is a company that may become insolvent or is abroad in another EU country.
Key facts
Deadline
Limitation under Law 66(I)/2012: 6 years for contract claims, bank book debts, cheques and promissory notes (sections 7 and 8); 3 years for fees of professionals and contractors (section 7(2)); 10 years general period (section 4); 12 years for mortgage claims (section 5); 15 years for actions on a judgment (section 10). The period is interrupted and restarts on written acknowledgment, payment of more than 50% of the debt, or filing of a claim (section 17).
Under the Civil Procedure Rules 2023, the defendant must file a defence within 28 days of filing an appearance.
What to do
Collect the evidence. Gather the contract, order confirmations, invoices, delivery notes, emails or messages in which the debtor accepts the order or promises payment, and bank statements. For a private loan, any written evidence of the loan and its terms is essential: a loan agreement, a transfer with a reference, or messages acknowledging the debt.
Make a statement of account showing each invoice, payment received and the balance. A clear, documented calculation is the core of every later step and of the court claim.
Check limitation and interrupt it if needed. Identify the date on which the cause of action arose, usually the due date of payment, and the applicable period: 6 years for contract claims, 3 years for professional fees and contractors' remuneration, 10 years as the general period. Interest on old debts also has to be checked.
If the deadline is close, ask the debtor to acknowledge the debt in writing, or file the claim. Under section 17 of Law 66(I)/2012, a written acknowledgment, payment of more than 50% of the total debt, or filing an action interrupts the period, which then starts again.
Calculate the claim and interest. Claim the principal and contractual interest at the agreed rate. If no rate was agreed, the court may award interest at the legal rate set periodically by the Minister of Finance, usually from the date of filing the claim or from the due date. Add agreed collection costs only if the contract provides for them.
Business-to-business invoices may also carry statutory interest for late payment under the rules on combating late payment in commercial transactions. Keep the calculation transparent.
Send a formal letter of demand. Send the debtor a letter by email and registered post stating the legal basis, the exact amount with a breakdown, a deadline for payment (for example 14 days), bank details, and that a court claim will follow without further notice. Attach the statement of account.
The Civil Procedure Rules 2023 expect parties to exchange information before litigation; an unanswered demand shows the court that you acted reasonably and supports a costs order in your favour. Many debts are paid at this stage.
Consider settlement or mediation. If the debtor admits the debt but cannot pay at once, agree a written instalment plan with an acceleration clause (the whole balance becomes due on a missed instalment) and, ideally, a written acknowledgment of the debt, which also interrupts limitation.
Mediation in civil disputes under Law 159(I)/2012 is faster and cheaper than litigation for disputes about the amount or quality of work. A mediated agreement can be made enforceable.
File a claim at the District Court. If payment does not follow, file a claim form and statement of claim at the District Court with jurisdiction (usually where the debtor resides or the contract was made or performed). Serve it on the debtor, who must file an appearance and then a defence within 28 days. If the debtor does not respond, apply for judgment in default under Part 13 of the 2023 Rules.
For low-value claims, ask the registry about the simplified procedure; for cross-border claims within the EU, consider the European order for payment or the European Small Claims Procedure.
Enforce the judgment. A judgment does not pay itself. Under Cap. 6 you can apply for a writ of seizure and sale of the debtor's movable property, the sale of immovable property, an examination of the debtor's means and, after it, orders for monthly instalments, attachment of earnings or a garnishee order against the debtor's bank. You can also register the judgment against the debtor's immovable property.
A judgment can be enforced for 15 years after it became final (section 10 of Law 66(I)/2012), and interest continues to accrue.
If the debtor is insolvent or abroad. If a company debtor cannot pay its debts, you can consider a winding-up petition under the Companies Law, Cap. 113, or file your claim in an existing liquidation. For individual debtors, personal insolvency proceedings under Law 65(I)/2015 or bankruptcy under Cap. 5 may affect your rights; file your claim in time.
Cypriot judgments can be enforced in other EU countries under the Brussels Ia Regulation without a declaration of enforceability. Outside the EU, recognition depends on bilateral rules such as Cap. 10.
What to watch out for
- Letting the limitation period expire, especially the three-year period for professional and contractor fees.
- Relying on oral agreements without any written evidence of the debt.
- Accepting small partial payments without a written acknowledgment; only payment of more than 50% interrupts limitation.
- Threatening the debtor or contacting his employer; keep to lawful, written demands.
- Filing a claim without first checking whether the debtor has any assets to enforce against.
- Forgetting to file your claim in the debtor's insolvency proceedings within the deadline set.
Legal basis
Related court decisions
Frequently asked questions
How long do I have to recover a debt in Cyprus?
Under Law 66(I)/2012: six years for contract debts, bank book debts and cheques; three years for fees of professionals and contractors; ten years where no special period applies; twelve years for mortgage claims. A judgment can then be enforced for fifteen years.
How can I stop a debt from becoming time-barred?
Under section 17 of Law 66(I)/2012, the limitation period is interrupted and starts again if the debtor acknowledges the debt in writing, if the debtor pays more than 50% of the total debt including interest, or when you file a court claim.
Do I need to send a demand letter before suing in Cyprus?
It is strongly advisable. The Civil Procedure Rules 2023 expect parties to exchange information before litigation, and a clear written demand with a deadline supports a costs order in your favour if you must sue. Many debtors pay after a formal demand.
Can I charge interest on an unpaid invoice?
Yes, at the contractual rate if agreed. Otherwise, the court may award interest at the legal rate set by the Minister of Finance. Business-to-business late payments may also carry statutory interest under the late payment rules.
What if the debtor does not respond to the court claim?
You can apply for judgment in default under Part 13 of the Civil Procedure Rules 2023. The judgment can then be enforced under Cap. 6, for example against bank accounts, salary or property.
Can I recover money I lent to a friend without a contract?
Yes, if you can prove the loan. Bank transfers, messages acknowledging the loan or witnesses can prove it. A written acknowledgment by the borrower is valuable evidence and also interrupts limitation.
The debtor is a company that stopped trading. What can I do?
If it cannot pay its debts, you may petition for winding up under the Companies Law, Cap. 113, or file your claim with the liquidator if liquidation has started. Directors are not generally personally liable unless there is fraud or a personal guarantee.
Can I enforce a Cypriot judgment in another country?
Within the EU, yes, under the Brussels Ia Regulation, without a declaration of enforceability. Outside the EU, it depends on the law of that country and on bilateral arrangements, such as those under Cap. 10 for certain countries.
Is the limitation period suspended while we negotiate?
Not as a rule. Section 13 of Law 66(I)/2012 suspends the period only in specific cases, for example if, in the last six months of the period, you were prevented by force majeure or by the debtor from suing. Negotiations alone do not stop time running, so obtain a written acknowledgment or file the claim.
Can I sell or assign my debt to a collection company?
Yes, debts can generally be assigned. The assignee must notify the debtor and can then claim in its own name, subject to the debtor's defences. Consumer credit debts sold by banks are also subject to special rules for credit purchasers and servicers.
Legal guide – individual how-tos
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