Collecting overdue commercial debts in Saudi Arabia is a step-by-step process. It starts with documenting the debt, moves through an amicable demand and, where necessary, ends with court or enforcement action. Choosing the right route at each stage saves time and cost, and preserves the business relationship where possible.
This guide gives companies and suppliers a practical roadmap: what to prepare before a debt goes bad, when a formal notice is enough, when to turn to a payment order, a commercial lawsuit or direct enforcement, and what options are available when there are several creditors or the debtor has defaulted entirely.
Stage One: Assessing the Debt and Building the Evidence File
Before making any demand, answer one decisive question: do you hold an enforceable instrument? The answer determines the entire route.
| What you hold | The most suitable route |
|---|---|
| A check, a final judgment, an electronically registered promissory note, or a notarized contract or acknowledgment of debt | A direct enforcement request before the Enforcement Court, without a lawsuit on the merits |
| A debt that is proven in writing, due and of a fixed amount (approved invoices, a non-notarized acknowledgment of debt, explicit correspondence) | A request for a payment order before the Commercial Court, where its conditions are met |
| A debt disputed as to its existence or amount, or tied to the performance of reciprocal obligations | A commercial lawsuit on the merits, with urgent applications considered where needed |
In every case, put together a complete file containing the contract, purchase orders, proof of delivery, invoices, the statement of account, correspondence and any acknowledgment of the debt. Pay attention to the statutory time limits: claims within the jurisdiction of the Commercial Court will not be heard after five years from the date the right arose, unless the defendant acknowledges the right or the claimant presents an excuse the court accepts. An enforcement request will also not be accepted on an instrument that fell due more than ten years earlier.
Stage Two: Amicable Demand and Formal Notice
An amicable demand is not a mere formality. It reveals the debtor’s position and may produce an acknowledgment of the debt or a documented rescheduling. It also has a legal effect on compensation: the Civil Transactions Law provides that compensation is due only after the debtor has been given formal notice, unless there is an agreement or a legal provision to the contrary, and formal notice may be given by any agreed means of notification or any means prescribed by law.
Elements of an Effective Demand Letter
- A precise description of the debt: its source, amount, due date and supporting documents.
- A clear and reasonable deadline for payment.
- A reference to the next step if payment is not made, without threats or overreach.
- Delivery by a method that can be proven, such as the national address or the email address agreed in the contract.
Some routes require a specific prior notice. A payment order request requires notifying the debtor in writing at least five days before applying to the court. In the cases specified by the implementing regulations of the Commercial Courts Law, the defendant must be notified in writing at least fifteen days before the lawsuit is filed. The new Enforcement Law leaves it to its implementing regulations to specify the cases in which the debtor must be notified before an enforcement request is registered.
Stage Three: Settlement and Turning It into an Enforceable Instrument
If the debtor is willing to pay in installments, do not settle for an ordinary agreement. Document the settlement in a way that gives it the status of an enforceable instrument, because the Enforcement Law treats notarized settlement agreements and conciliation deeds, or those issued by bodies legally authorized to do so, as enforceable instruments. Practical options include conciliation through the Ministry of Justice’s electronic platforms, notarizing the acknowledgment of debt and the payment schedule, or issuing electronic promissory notes for the installments.
Illustrative example: a building materials supplier is owed overdue amounts by a contractor. The two parties agree on payment within six months, and the agreement is documented so that, if any installment is missed, the supplier can file an enforcement request directly instead of starting a new lawsuit.
Stage Four: The Court Route When There Is No Enforceable Instrument
Payment Order
The Commercial Courts Law allows a creditor to request an order for payment of the debt without filing an ordinary lawsuit, provided that the right is proven in writing, due for payment and of a fixed amount. The court circuit decides the request within ten days of its registration, and the debtor may file an objection within fifteen days of being notified. By law, payment orders are subject to expedited enforcement.
Commercial Lawsuit
If the debt is disputed, the route is a lawsuit before the competent court. The Commercial Court has jurisdiction over disputes between merchants arising from their commercial activities, and over claims against a merchant in commercial contract disputes where the original claim exceeds SAR 100,000. Urgent measures such as a precautionary attachment or a travel ban may be requested where the grounds for them exist. Jurisdiction, the statement of claim and time limits are covered in a separate article in this series.
Stage Five: Enforcement
Once you hold an enforceable instrument, the enforcement request is filed electronically through the Najiz platform. Note that the new Enforcement Law was published in the Umm Al-Qura Gazette on 14/11/1447 AH, corresponding to May 1, 2026, and takes effect 180 days after its publication, that is, approximately in late October 2026 (around October 28, 2026 by calculation); the exact date is whatever the official authorities announce. Under the new Enforcement Law, if five business days pass after the judgment debtor is notified without compliance, compulsory enforcement measures begin: notifying credit information bureaus and attaching assets, with the possibility of requesting a travel ban and asset tracing where there are indications to support it. We cover the changes introduced by the new law in a separate article.
Practical tip: identify to the court the debtor’s assets known to you, such as bank accounts, real estate and receivables owed to the debtor by third parties. The court determines the assets subject to enforcement in the way that secures the fastest payment, and accurate information saves time.
Stage Six: When the Debtor Is Insolvent or There Are Multiple Creditors
When a debtor’s debts exceed its ability to pay, individual enforcement may not be the best option. The Bankruptcy Law allows a creditor, as well as the debtor and the competent authority, to apply to open financial reorganization proceedings for the debtor in specified cases, or to open liquidation proceedings if the debtor is in default or bankrupt. These proceedings have significant effects on existing claims and on the ranking of creditors, so they require a legal and financial assessment before being chosen.
Do You Need a Licensed Debt Collection Company?
That depends on the type of debt and the creditor. Collection of debts owed to banks and finance companies is subject to the instructions of the Saudi Central Bank (SAMA), including the mechanism for outsourcing debt collection operations, which requires SAMA’s no-objection to the outsourcing contract, along with compliance with debt collection and customer protection rules. Commercial debts between businesses, on the other hand, may be handled by the creditor itself or through a licensed lawyer, especially when the file is heading to court or enforcement.
Common Mistakes That Weaken a Creditor’s Position
- Delaying the demand until the periods after which claims will not be heard are about to expire.
- Accepting a verbal or undocumented rescheduling without an enforceable instrument.
- Relying on a paper promissory note in new transactions after the new law takes effect.
- Sending demands in threatening language that may be used against the creditor.
- Failing to keep the debtor’s addresses and details up to date in the contract.
If you have overdue commercial debts and need an assessment of the most suitable route for each file, you can use the debt collection service at Alburhan Law Firm, or contact us to present the facts and documents. To learn about corporate engagement options, you can also ask us about our packages.
Frequently Asked Questions
Do I always need to file a lawsuit before enforcement?
No. If you hold an enforceable instrument, such as a check, a final judgment, a promissory note registered on the national platforms or a notarized contract, you can file an enforcement request directly.
What is the difference between a payment order and an ordinary lawsuit?
A payment order is a shortcut for debts that are proven in writing, due and of a fixed amount, and it is decided within a short period. An ordinary lawsuit suits disputed debts that require pleadings and evidence.
Can I claim compensation for late payment?
This is a delicate issue. The Civil Transactions Law does not permit agreeing in advance on liquidated damages where the obligation is a sum of money, while a claim for compensation for actual, proven harm is subject to the court’s discretion, the controls of the law and Sharia rules. Each case therefore needs its own assessment.
This article provides general information and is not a substitute for legal advice tailored to your situation.
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