How to claim your company's unpaid debts
In the business world, one of the most frequent and worrying problems is the unpaid debtsBoth individuals and corporations may encounter clients or business partners who fail to meet their payment obligations, seriously impacting the company's liquidity and stability.
When the possibilities of reaching an amicable agreement between creditor and debtor are exhausted, the most effective way is to initiate a litigation.
In this article we analyze the different Legal options available for claiming debts in Spain and we resolve the most common questions that arise when a company decides to go to court to recover what it is owed.
What is litigation?
Un litigation It is a judicial procedure by which a dispute is resolved legal controversy or conflict between two or more parties.
For a dispute to exist, three fundamental elements must be present:
- A conflict between the parties, usually arising from a breach of contract or non-payment.
- The submission of the case to a judge or court, who will be the one to decide the resolution.
- A regulated procedure, which establishes the phases and guarantees of the judicial process.
Unlike other mechanisms such as mediation or appeals to the Public Administration, litigation ensures the intervention of a judge, which gives the resolution full legal and executive force.
Litigation as a tool for claiming unpaid debts
In the field of Civil and Commercial Law, litigation is one of the main tools available to a creditor to to legally claim a debt.
When friendly negotiations fail, the next step is to go to court. Through a final judicial resolution, the creditor may demand compliance with the obligation and satisfy your credit with the debtor's assets and rights, both present and future.
In this way, litigation becomes a key instrument to guarantee the recovery of unpaid loans and protect companies' liquidity against defaults.
What is the Foreign Exchange Trial?
El Exchange Judgment It is a special procedure that allows the claim of unpaid credits when the debt comes from negotiable instruments, such as bills of exchange, checks or promissory notes.
This trial It is fast and limits the debtor's defense possibilities, making it an effective option for the creditor.
The procedure is initiated by means of a claim accompanied by the negotiable instrument, which must comply with the formal requirements established in the Foreign Exchange and Cheque Law.
If the judge verifies that the title is correct, the debtor is required to pay the debt within a period of 10 working days and, in addition, the precautionary seizure of assets sufficient to cover the amount of the debt is ordered.
Possible scenarios in the Foreign Exchange Trial:
- Payment by the debtor: The embargo is lifted, but the debtor must assume the costs of the process.
- Non-appearance or non-payment: The debt is executed, converting the embargo into an enforceable one.
- Debtor's opposition: The debtor may file an exchange opposition claim, but his grounds for opposition are limited by law.
Advantages and disadvantages of the monitoring process
El Monitoring Process It is another effective mechanism for debt collection, used mainly when the creditor has a documented debt and there is no limit on the amount to be claimed.
Advantages of the Monitoring Process:
- No limit on amount: It can be used for any type of debt, regardless of its amount.
- Fast and easy: It is only necessary to present the documents that prove the debt.
- Direct execution: If the debtor does not respond to the request, the debt can be enforced directly against the debtor's assets.
Disadvantages of the Monitoring Process:
- Debtor's address: It is essential that the debtor's address is correct. If he cannot be located, the process will be closed.
- Debtor's opposition: If the debtor files an objection, the procedure becomes a declaratory judgment, which may prolong the resolution of the case.
Conclusion
To claim unpaid debts from your company, it is essential to choose the most appropriate legal procedure based on the circumstances of the debtor and the debt.
El Exchange Judgment and the Monitoring Process They are quick and effective options, but they require a prior assessment of the chances of success.
If the debtor is traceable and unlikely to object to the claim, the Monitory Process may be the best option.
However, if there are doubts about its location or opposition is expected, it may be preferable to opt directly for a declaratory judgment.
In addition, if the debtor is located in another country of the European Union, it is possible to resort to European Order for Payment Procedure, a tool designed to simplify debt collection between member countries.
In any case, having a Legal and economic advice for companies Specialized advice is key to ensuring a successful and efficient claim.
