Debt Recovery in Spain

Debt Recovery in Spain

Posted by adm4yGog24 in Corporate Law 04 Dec 2013

 

If you or your company is owned money, and conversations with the person or company that owns you the amount have failed, you should seek advice from an attorney. Our team has wide experience dealing with debtors.

Normally, the debtor, whether a person or company, tries to delay or avoid payment by making up false allegations about his or their bad financial situation, excuses or promises of future payments that may never come true. It is then when you need do something more that just emails or phone calls. For instance, a burofax could be a good way to let your debtor know that you have an attorney watching over your case. Unfortunately, sometimes not even such warning is enough, thus you must count with attorneys who will put their skills and effort to guarantee that you recover what is rightfully yours. Our attorney could issue letters, County Court claims, statutory demands, and bankruptcy or winding-up proceedings.

Extrajudicial claims

Before filing your case in Court, which can be long and complicated, it is advisable to try to reach an agreement. Our attorney may issue a Letter of Demand which is a formal request to your debtor about complete payment within a certain date. With this document your debtor may be encouraged to open to negotiations with you.

This Letter of Demand normally states the details of the debt, the legal actions which will take place if payment is not attended and it will let the debtor know as well that legal fees and interests will also be included to the final amount owed.

Finally, if we cannot reach any agreement, it will serve as proof in court as well.

 

Court-ordered collections

If all previous documents and warnings have been ignored, we must file the case in Court. In such case there are different ways to bring legal actions on this matter in Spain:

  • Proceso Monitorio

  • This action is relatively quick. It is executed only when the monetary debt is overdue. The debtor is given a notice to make payment within twenty days or to challenge it. In the absence of a defense judgment, it can be pronounced quickly. This enforcement will have a validity of 5 years.

    When there is a defense to the debt claim, normal procedures are follow to recognize bets.

  • Juicio Verbal procedure

  • A Juicio Verbal is for debts up to 6,000€. In this proceeding, both parties are summoned for a hearing (called Vista), and the judge makes his decision based on the oral declarations of the parties around 6 weeks later.

  • Juicio Ordinario

  • This proceeding is issued for bets over 6,000€. It could take more time, even years, to be settled. In this case, there might be a preliminary hearing to reach an agreement, make complementary pleadings or report any irregularity. Later, there is an evidence phase as well. Finally, judgment is rendered.

    This resolution can be appealed in the court of Appeal as well.

  • Juicio Cambiario

  • Spanish legislation has a separate form of proceeding when your claim is based on an unpaid bill, drafts of exchange or promissory notes. In this Jucio cambiario, a court order is made for payment within ten days and provides that if payment is not completed, there may be a preventive embargo over debtor’s properties or assets.

  • Request bankruptcy process

  • In the event that the debtor has been declared by court unable to pay their creditors, it is settled an insolvency proceeding (Concurso de acreedores). Bankruptcy can be instituted at the request either of the debtor or the creditor.

    If the debtor files the bankruptcy proceeding, it is called “concurso voluntario”. In this case, the debtor must reach to an agreement with the judge on how payment will be arranged. The court should facilitate negotiations between you and the creditors in order to restructure the debt.

 

Counting with the appropriate guidance to recover your money can make the different between success and failure. We have worked for several foreign companies as well. Contact us and hire our services because we know how to arrange favorable and competitive terms for you in your debt recovery process.

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