Debt collection in Iraq — a file map before demand or suit
By Othman Al-Juboori, Iraqi lawyer, expert in Iraqi labour law, founder and Managing Director of Al-Taswia Legal Services Company. Baghdad, October 2026.
“Debt collection Iraq” searches usually start after months of non-payment. For local or foreign creditors, the highest-value step before a demand letter or suit is building an evidence tree and naming the right parties. General information, not advice for your case.
1) Put the debt on one sheet
Who owes (company, individual, guarantor); the basis (supply contract, loan, accepted invoice, prior judgment, cheque, mix); amount and currency with partial payments; last written contact.
2) Evidence tree before demand
Contract/POs and annexes; statements or accepted invoices; security (pledge, guarantee, cheques) with clear dates/signatures; an unedited claim timeline; Arabic–English HQ summary aligned with the Arabic file.
3) Choose the track
Written settlement with payment terms and authority to sign; a formal demand that preserves position; litigation when negotiation collapses. Do not advertise “penalties” or “interest at X%” in correspondence until grounded in official text and your file.
4) Foreign creditors
Clear authority for the Iraq representative; name match across contract, IDs and commercial register; written confirmation from someone with authority. If a labour dispute sits inside the debtor company, labour gratuity remains due in all cases including resignation (Labour Law 37/2015 Art. 45) — do not treat it as an informal “set-off” against a commercial debt without a clear basis.
5) Red flags
Sudden address change or dissolution; denial of delivery despite prior acceptance; a threat of a criminal complaint during a civil debt negotiation — separate tracks immediately.
5b) Debtor companies with foreign staff
A commercial debt file does not cancel social-security or 80/20 duties. Social-security rates (Law 18/2023): employer 12%, or 25% for private and mixed-sector employers whose profits come from selling Iraqi oil and hydrocarbons; state share 8%; worker 5%. Workforce ratio: 80% Iraqi / 20% foreign (Council of Ministers decision 8/10/2024). Do not weaponise these as “collection pressure”; they are a separate compliance track.
6) What this article does not quote
No fine amounts, interest percentages, limitation periods or Civil/Commercial Code article numbers here.
7) How to contact us
Debtor name, one-sentence basis, approximate amount/currency, guarantor/security if any, and the three key documents. Hours: Sat–Thu 5:00–9:00 PM.
About Al-Taswia Legal Services Company
Founded in 2018 in Baghdad; team of 19. Specialist area: Iraqi labour law; also civil law, banking law, criminal cases, company registration, review of Iraqi legislation and Arabic–English legal translation. Office: Al-Yarmouk, Four Streets, next to Soya restaurant. +964 771 100 2200 · info@al-taswia.com · www.al-taswia.com.
General information, not legal advice.