Debt Collection Agency in Bermuda - No Win, No Fee

Step 1 - How does amicable (pre-legal) debt collection work in Bermuda?

Pre-legal collection means recovering an unpaid invoice without a contested court case, through reminders, a formal demand and negotiation. In Bermuda, this phase is shaped by a genuinely distinctive local feature: a dedicated licensing and conduct law for commercial debt collectors, the Debt Collection Act 2018.

Bermuda's own licensing regime for debt collectors

A commercial debt collector operating in Bermuda must hold a licence from the Debt Collection Licensing Authority (Debt Collection Act 2018, s.7); running an unlicensed debt collection business carries a penalty of up to a $60,000 fine or one year's imprisonment on summary conviction, or up to a $100,000 fine or five years' imprisonment on indictment. A creditor collecting its own debt does not need a licence.

Statutory conduct rules for licensed collectors

A licensed collector may make no more than 3 unsolicited contacts on behalf of the same creditor within any 7 consecutive days (s.16), must identify itself and disclose the purpose of contact, may not make false or misleading representations (s.17) or engage in unfair or unscrupulous practices (s.18), and must send a written debt-validation notice - the debt amount, the creditor's name and the dispute procedure - within a stated period of first contact (s.20). A debtor who disputes a debt can require collection activity to pause pending validation, and payments received cannot be applied to a disputed debt without the debtor's authorisation - the Act also sets rules for how a payment is applied across several debts owed by the same debtor (s.21). Sharing a debtor's information with a credit-reporting agency is separately restricted (s.22). A debtor who believes these rules were broken can complain to the Department of Consumer Affairs.

Bermuda's own statutory commission caps

Section 19 of the Debt Collection Act 2018 caps what a licensed Bermuda collector may charge as its own commission: up to 20% of the original debt, charged once, plus up to 2% of the outstanding balance per month in administrative fees on a repayment-agreement recovery, or up to 10% on a one-time, lump-sum recovery. This is Bermuda's own statutory ceiling on what a licensed local collector may charge a debtor - it is not Debitura's fee, which follows Debitura's separate No Cure, No Pay platform pricing (see Fees, below).

Negotiation and escalation

A written, signed acknowledgment of the debt, or a part payment, made before the 6-year Limitation Act 1984 period expires resets the limitation clock (s.30). If the debtor still does not pay, or disputes the claim without engaging with the validation notice, escalation to the Magistrates' Court or Supreme Court is the next step.

Step 2 - How do you obtain an enforceable title in Bermuda?

To enforce a debt in Bermuda you need a judgment. Which court hears the claim depends on its value.

The Magistrates' Court route

For a claim up to $25,000, the Magistrates' Court - a court of summary jurisdiction under sections 15 and 16 of the Magistrates Act 1948 - is the venue. A claim is commenced by an Ordinary Summons, issued in duplicate by the court clerk and naming the parties and the particulars of the claim; current Bermuda practice does not use the older Commonwealth term "plaint" found in some other jurisdictions' magistrates-court procedure. No separate small-claims sub-track exists below this ceiling - $25,000 is simply the court's general civil limit, not a distinct simplified tier. A related rule lets an account-balance claim up to $10,000 be brought here even where the account's gross total exceeded $10,000 (s.18).

The Supreme Court route

For a claim above $25,000, or one the Magistrates' Court considers more suitable for a higher court, the Supreme Court - a superior court of record with unlimited civil jurisdiction, including a dedicated Commercial Court - hears the case (Supreme Court Act 1905, s.12). Law and equity are administered concurrently, so the court can grant any remedy either would allow (s.18). A company must be legally represented in either court; an individual may represent themselves.

Costs

Cost recovery in the Magistrates' Court is capped under the Magistrates' Court Rules and the Court Fees and Expenses Rules 1972; the exact fee schedule was not independently confirmed for this guide, so no specific figure is stated here. In the Supreme Court, the Registrar taxes bills of costs against the applicable scale of fees (Supreme Court Act 1905, s.49).

Step 3 - How does debt enforcement work in Bermuda?

Once a judgment exists, enforcement in Bermuda runs through the Supreme Court's own execution officer, the Provost Marshal General, and a set of court-ordered instruments.

Ways to enforce a claim in Bermuda

• Writ of fieri facias: the Provost Marshal General seizes and sells the debtor's property to satisfy the judgment (Supreme Court Act 1905, s.47).
• Garnishee order: attaches a third party's debt that is already due or accruing to the judgment debtor; it does not reach future debts.
• Charging order: registers the money judgment as a charge against the debtor's real property.
• Receiver by equitable execution: a court-appointed receiver collects assets, including future receipts, where the other instruments are impractical.
• Sequestration: a contempt-based remedy against a non-complying debtor's property.

Process in Bermuda

On a competing claim to seized property or sale proceeds, the court is notified and an interested party may seek directions by summons (Supreme Court Act 1905, s.47(2)). The Registrar taxes costs against the applicable scale (s.49). The precise Rules of the Supreme Court 1985 Order numbers governing garnishee proceedings and writs of execution were not independently confirmed against Bermuda's own current Rules text for this guide - the primary-source document could not be reached this session - so no specific Order number is cited here, though the instruments themselves, named above, are well documented by Bermuda law firms writing on their own jurisdiction.

Cross-border debt collection in Bermuda

Bermuda's cross-border position is shaped by its status as a British Overseas Territory: it has its own Supreme Court and Court of Appeal, sitting on its own body of local statute law, but its final court of appeal is the Judicial Committee of the Privy Council in London - not the UK Supreme Court, and not a Bermuda-only apex court. This is a genuinely distinctive structural feature compared with most jurisdictions covered in this guide series.

Enforcing a foreign judgment in Bermuda

A judgment from a prescribed, reciprocating jurisdiction may be registered directly in the Supreme Court within 6 years of the judgment, under section 3(1) of the Judgments (Reciprocal Enforcement) Act 1958. Illustrative reciprocating jurisdictions include England & Wales, Scotland, Northern Ireland, the Australian states, Jamaica, Barbados and Hong Kong, though the Act's full current Schedule was not independently confirmed for this guide and should be checked for any specific country before relying on it.

A judgment from any other country has no direct registration route. The creditor must instead bring a fresh Bermuda action on the foreign judgment, commonly resolved by summary judgment where the debtor has no real defence, provided the judgment is for a fixed, ascertainable sum, is final and conclusive, and the foreign court had jurisdiction under Bermuda's own conflict-of-laws rules. The available defences are narrow: fraud, breach of natural justice, and public policy.

Enforcing an arbitral award

An action to enforce an arbitration award, where the submission is not under seal, has a 20-year limitation period under section 9 of the Limitation Act 1984 - a notably longer window than the 6-year period for an ordinary contract debt.