If the measures taken extra-judicially fail to recover the debt and the financial report (recommended) suggests that it would be worthwhile to continue pursuing the debtor, the next stage is to bring the matter before the courts.
This effectively means using the ‘Proceso Monitorio’ which is a special court process specifically set-up for the speedy resolution of outstanding debts which cannot exceed €250,000.
Upon presentation to the court of the petition together with supporting documentary evidence (contracts, invoices etc) the court will decide whether there is a sufficiently substantial case for the debt to be repaid.
The debtor is then informed by the court of the petition and at this stage there are three possible outcomes:
1. Debtor Agrees To Pay The Debt
In 45% of cases brought via the ‘proceso monitorio’ the matter is resolved at this point with the debtor agreeing to pay the creditor the amounts owed.
2. Debtor Does Not Respond or Appear in Court
If the debtor fails to respond to the court action or doesn’t turn-up at the hearing then the judge may place an embargo on any assets or income of the debtor to force repayment of the amount owed. 39% of cases are resolved in this fashion.
3. Debtor Opposes Payment of the Debt
If within a timeframe of twenty days the debtor opposes the action and does so in writing then it becomes necessary for the court to hear arguments from both sides. The debtor will require documentation to support their case. The debtor opposes the debt in this way in 16% of cases.