Owed Money? Pursuing Debtors in Spain

For legal assistance with debt recovery in Spain, go to: Debt Recovery Spain

Setting-up a business in Spain comes with all sorts of hurdles to be overcome – many of which are not easy. One thing that many will come across, unfortunately, is the situation where we are owed money by a client who, for whatever reason, refuses to pay. Once all of the standard methods of pursuing a debt have been exhausted – phone-calls, letters, more phone-calls, even more letters, perhaps from a solicitor this time – we reach the point where we have to decide whether to drop the matter or pursue it legally.

Of course one of the major considerations has to be whether your debtor has the financial resources to comply with the court’s judgment. So, assuming the debt outstanding combined with your assessment of the debtor’s financial position warrant taking the matter further, how do you proceed?

The ‘Procedimiento Monitorio’ is a judicial fast-track that is designed to process claims for payment of outstanding debts and it is carried out in the Civil Courts. It is able to handle any claim up to a limit of €250,000.

Presenting the Claim

The first step is to present the claim to the court which is done in writing and to which is attached all supporting documentation such as contracts, signed delivery documents, invoices etc

Evidence must be shown that all reasonable means have already been employed to have the debt paid. This would typically be satisfied by presentation of evidence that a ‘burofax’ has been sent to the debtor regarding the outstanding monies. A burofax is a type of registered letter which can be sent via the local post office a receipt for which is proof of when and to where it was sent.

The judge will then consider the application and then inform us by writing of the beginning of the proceedings at the same time as advising the debtor that they have either 20 days to pay the debt or else present a written objection along with supporting documentation.

Failure to present a written objection will mean that the court will view the debt as having been recognised and accepted by the debtor. If the debt is not paid thereafter ‘execution of the debt’ may be requested.

Disagreement with the debt

Should the debtor present a written objection then the ‘Procedimiento Monitorio’ becomes judicial proceedings which require the attendance of a solicitor and procurador. Both sides are then invited to state their side of the case and the judge makes a decision.

Costs and Time-frame of Proceedings

Unless it is a company or sole trader with income over €5million per annum applying for a court judgment there are no court costs in the first instance. What will increase the costs will be when recourse to a solicitor and procurador become necessary. In the case of a non-Spanish applicant this may well be the case from the beginning due to understandable language reasons. As autonomous professionals they are entitled to charge as they please and it is a matter for the applicant to choose  lawyers in Spain carefully.

Regarding the time-frame, it does depend also on how events transpire but often it would seem that an order from the court to repay the debt within 20 days has the desired effect. However, should the debtor present a written objection then of course the proceedings will necessarily lengthen to include a hearing and the court will have to deliver it’s decision. There is then also the possibility of an appeal.

That said, all in all the ‘Procedimiento Monitorio’ process for enforcing payment of outstanding debts is relatively quick, cheap and simple which makes it an interesting option for those who need to enforce a debt.

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