Debt collection in Spain
Does your company have to deal with a debt collection case in Spain because a Spanish customer has not paid your invoice? Our Spanish debt collection specialists and lawyers will be happy to help you. We ensure that your outstanding invoices are paid quickly. Read here why you would be better off by entrusting us with your case instead of a debt collection agency, if you have a debt collection case in Spain.
“The late payments regulation in Spain does not contemplate any type of penalty for late payments over 30 days or over the agreed due date. As a consequence, long payment terms or delinquent payment rate is something to keep an eye on when dealing with Spanish customers, since it does happen quite often.”
International debt collection in Spain
When you do business with a Spanish trading partner, you are confronted with different business practices, customs, as well as rules and regulations than those you are used to. In addition, you must also deal with a different language. That makes debt recovery in Spain often complicated and time-consuming for you. That is why you should call in our Spanish specialists. They have the means to get your debtor to pay.
Payment behaviour of Spanish companies
- Statutory term of payment of invoices is 30 days
- Spanish companies are among the worst payers in Europe
- A payment term of more than 70 days is very common
- When sending payment reminders, a payment term of 7 days is customary
Debt collection in Spain
Like many southern European countries, Spain is one of the worst payers in Europe. Spanish companies often feel little pressure to pay an invoice on time. Even the Spanish government does not set a good example: the Spanish government itself is known for being a slow payer.
When doing business with a Spanish company, you should take the long payment terms into account. It is not uncommon for your Spanish customer to pay your invoice after 70 days. The average payment term for Spanish companies is 91 days and the late payment term over the agreed due date is of 14 days.
However, there are some initiatives you can take to deal with debtors. For example, every year the Spanish tax authorities publishes a list of debtors who still have an outstanding debt with the tax authorities. This list often includes famous singers and football players, but also well-known multinationals and sports clubs. As no one would like to be mentioned in this list, the Spanish tax authorities hope to get outstanding invoices paid this way.
Advantages of debt collection in Spain
- Spanish collection lawyers in your country
- Spanish-speaking lawyers
- Highest success rates
- Collection throughout Spain
- Always a single point of contact
- 24/7 online access to our portal
- No Cure No Pay debt collection
Spanish lawyer in your country
The best way to collect your invoice in Spain is by contacting one of our Spanish lawyers or collection specialists. By doing that, you will not have to worry about anything, or even travelling to Spain: our debt collection specialists at Bierens will take care of everything. They have extensive knowledge and experience with laws and regulations in Spain and speak Spanish fluently. Therefore, they will be able to make your Spanish debtor pay quickly.
Debt collection procedure in Spain
The collection process in Spain can be divided into two phases. In the extrajudicial phase, the debt is collected without the intervention of the court. In the judicial phase, the court intervenes in order to make your Spanish customer pay. Because we are a law firm, we can assist you during both processes.
Written demand letters and phone calls
We send the debtor a written demand letter and contact them by telephone. We request that they pay your claim within a few days, together with interest and costs. In Spain we send a BUROFAX, which is an official registered letter in which we let the Spanish debtor know that there is an outstanding debt that needs to be paid. Your debtor will then be given a few days to make the payment. In specific cases, we will also talk to your debtor face to face.
Registration in the blacklist
Our Spanish team can register your debtor on a blacklist called “ASNEF”. This list is often reviewed by banks and financial institutions. Companies registered in this list often face more difficulties when applying for financing or taking out an insurance policy. These lists are also often consulted with credit reports. Naturally, your Spanish customer would want to avoid being registered on this list, which makes it a good way to enforce pressure.
If your debtor refuses to pay during the extrajudicial phase, we can, in consultation with you, start legal proceedings. Of course, we will always let you know in advance what the possible costs are and will only get started after having received your permission.
Do you want to start a judicial debt collection procedure against your Spanish debtor? Then the first thing to know is: in which country should you litigate? In your own country or in Spain? The answer will depend on the competent judge.
In your general terms and conditions, you can make agreements about the competent court in the event of a payment conflict. The clause is also known as the choice of forum. Did you not make any agreements? Then the main rule is that the court in the country of the defendant has jurisdiction, which in this case is Spain. You must then go to Spain to follow legal proceedings there.
Debt collection laws in Spain
When taking legal action against a debtor located in Spain, there are several Spanish collection laws that we can rely on. The best collection procedure to use will differ depending on the situation. Of course, our lawyers will always look for the best option for you and your collection case.
In comparison to your country, legal proceedings might take longer in Spain. The Spanish legal system is characterised by all kinds of formalities that both parties have to follow. For instance, in Spain for a lawyer and bailiff to be able to represent its client in court, they must have a power of attorney granted on their behalf by the client. As a result, litigation often takes some time. Our Spanish lawyers know their way around the Spanish legal system perfectly well. They can also advise you on the best procedure to follow for a successful debt collection.
Payment order procedure (“Proceso Monitorio”)
The order for payment procedure (“proceso monitorio”) is a procedure in which normally a lawyer sends an application for an order for payment to the court, even though the intervention of a lawyer is not legally compulsory. This application must be supported by documents that show that there is an outstanding invoice. The court then sends the debtor a payment request, in which the debtor is requested to respond within 20 business days. Within these 20 days, the debtor can pay the claim or object to the claim if he disagrees with the claim.
What if the debtor does not react within these 20 days? Then the court will issue an enforceable title in favour of the creditor for the amount of the payment request.
Is there a disputed claim? Then the procedure is forwarded to an accelerated regular proceeding (juicio verbal) or a standard regular proceeding (juicio ordinario), depending on the amount of the claim.
Regular proceeding up to €6000 (“Juicio Verbal”)
This proceeding can be applied for claims up to €6,000. A lawsuit is filed with the court, together with the documents that support the claim. The court then examines it and all related documents and decides whether to initiate the requested legal proceedings. A copy of the lawsuit and its documents is sent to the debtor. The debtor then has 10 business days to file its reply in court. If any of the parties want a hearing, the court will appoint one. If not, it will rule the judgement directly after receiving the reply from the debtor.
Regular proceeding from €6000,- onwards (“Juicio Ordinario”)
This proceeding can be applied for claims over €6,000. A lawsuit is filed with the court, together with the documents that support the claim. The court then examines it alongside all related documents and decides whether to initiate the requested legal proceedings. A copy of the lawsuit and documents are sent to the debtor. The debtor then has 20 business days to file its reply in court.
After that, the court appoints a preliminary hearing to determine if there is an amicable solution. If not, the disputed facts and the means of evidence are established, and another hearing is scheduled for the trial. Should there not be any supporting evidence other than the documents, then the court might skip the second hearing and go straight to the ruling. On average a regular proceeding takes 21 months.
Cheque enforcement (“Juicio cambiario”)
Has your debtor paid your claim with a cheque, a bill- of exchange (“draft”) or a 'pagaré' (a form of cheque which states the date in which it can be cashed) or has it bounced when presented for payment? Then a special procedure can be initiated: the cheque enforcement or “juicio cambiario”.
Based on the unpaid cheque and the bank's statement, a request can be made to the court to seize the debtor's assets. The court will then give the debtor 10 days to pay or oppose. There are few possibilities for the debtor to object and only those that are specifically stated in the law.
Spanish lawyers and bailiffs (“procuradores”)
In most proceedings in Spain, a party in a proceeding must be assisted by one lawyer and by a bailiff (“procurador”). The bailiff represents the party in court, monitors the time frame and ensures that the procedural documents are delivered and received from court as well as from the opposing party on behalf of the party. The lawyer is responsible for the management of the proceedings, defines the strategy, drafts and writes the lawsuit and the rest of the proceedings, pushes the proceeding forward and pleads the case in court on behalf of his client.
International collection laws
In addition to Spanish collection laws, there are also a few European measures that can be used if your Spanish customer refuses to pay. It is important for the European Union that trade between European countries is stimulated. Therefore, complicated procedures are unwanted. That is why, in addition to the normal procedures, there are two alternative procedures that can be used for foreign claims between two EU countries: the European Payment Order Procedure and the Small Claims Procedure.
Both procedures are relatively quick and inexpensive. In order to launch them, a standard form must be completed and sent to the competent court. If you and your trading partner have not previously agreed on the competent court in the event of a conflict, then it is usual for the judge in the defendant's country who has jurisdiction, which in this case is the Spanish court. The court then deals with the collection case and makes a judgment.
The Small Claims Procedure is only suitable for small claims up to € 5,000. The advantage is that it can also be used for disputed claims. The European Payment Order only applies to undisputed claims. Although it is a simple procedure, it is not used very often. Your Spanish debtor only needs to indicate that there is a dispute, and the entire procedure will be discontinued. Other collection procedures will then follow. This will cost you time and money.
Litigation in your own country
Have you agreed in the general terms and conditions that the court in your country is competent? Then legal proceedings can be started in our country. Depending on your specific situation, our lawyers will look at what is most beneficial for your company. If we are going to litigate in your country against your Spanish debtor, we can start ordinary civil proceedings. Both parties will be heard, after which the court will make a judgement.
When a judgment in your country has been made, it must still be executed in Spain. Within the EU, it is established that all judgments passed in a member state are also recognised in other EU countries. For the execution of a judgement in Spain, your court issues a certificate. This is then sent to the bailiff in Spain. The bailiff then ensures that the judgment is executed in Spain.
The enforcement in Spain is carried out and supervised by the court of the debtor's place of residence. This means that court officials perform the execution, and not the bailiffs. An application for execution must be made to the court by a bailiff and a lawyer on behalf of the creditor.
Once the limitation period has been exceeded, an outstanding invoice expires. It is no longer possible to enforce its payment through the court. It is therefore important to keep a close eye on this limitation period.
For business claims in Spain, the general limitation period is 5 years. This period starts as soon as the claim becomes due. This corresponds to the due date of the invoice. If the payment period of an invoice is 30 days, the limitation period of 5 years starts after those 30 days have passed.
Imagine: you have delivered an order to a customer. On April 1, 2017 you send the corresponding invoice, with a payment term of 30 days. Your customer did not pay. The due date of the invoice was May 1, 2017. The 5-year limitation period starts from this moment. Your invoice will therefore expire on May 1, 2022.
Exceptions to the limitation period
The limitation period of 5 years applies to normal claims. For some claims, a different limitation period applies. According to the EU policy, a limitation period of 1 year often applies to matters relating to transport law. For professional services, such as lawyer's fees, a limitation period of 3 years applies. For the enforcement in court of unpaid cheques (“juicio cambiario”), the limitation period of 3 years applies.
Preventing your invoice from expiring
It is possible to prevent your invoice from expiring by interrupting the limitation period. The interruption stops and resets the limitation period. In Spain, there are 3 ways to stop a limitation period:
- A Burofax (a type of registered letter) from or to the debtor confirming the existence of an outstanding invoice. In addition, the outstanding amount is clearly stated. Other communications means are acceptable as long as delivery and contents thereof can be proven.
- A debt acknowledgement by debtor.
- A claim filed in court.
It is therefore most profitable to send the letter of suspension at the end of the limitation period. But of course, make sure that you do this on time, before the limitation period has expired. Otherwise, you run the risk of your invoice being expired and you will no longer be able to collect your claim legally.
Legal areas for debt collection in Spain
For years, we helped many companies around the world with their debt collection cases in Spain. Thanks to our expertise, we have not only assisted foreign businesses, but also Spanish firms in their own country. We specialise in debt collection cases in various areas of law:
- Buying and selling
- Leasing and renting
- Agency agreement and distribution agreement
- Damages and unlawful acts
“Bierens is a highly effective and professional partner. Not only do they have a good debt collection procedure, they also give solid advice.”
Manuel Maas, Eneco
Is your debtor located in Barcelona, Madrid, Malaga or Valencia? The location of your debtor does not matter. Our specialists can assist you throughout Spain, including Catalonia. It is no longer necessary for you to seek the help of a debt collection agency or a lawyer based in Spain in order to successfully collect your case. You can simply transfer your case to us online, and our Spanish specialists will immediately start working on it. With a Spanish department in our head office in Barcelona, we can effectively collect your claims.
More than a debt collection agency
If you are currently looking for a collection agency, know that you would be better off with a collection lawyer. Our Spanish debt collection lawyers have more resources than a debt collection agency. Moreover, they work faster and are also more successful. The speed and efficiency of our services can only be beneficial for your organisation, as they will allow you to quickly get your money.
No Win No Fee debt collection
During the extrajudicial phase, we work based on the No Win, No Fee principle. If we do not collect, then you pay no legal fee. You only pay €150 for administrative costs. After all, an unpaid invoice causes enough frustration. We think it would be unfair if you were to be faced with all sorts of additional fees.
You only pay a fee if we can collect the claim. We try to recover this fee from the debtor as much as possible. Therefore, a successful collection case will cost you almost nothing! That is what we call justice, as you will receive what you are entitled to.
Do you have a Spanish customer who has left your invoice unpaid? Or do you have another payment conflict with your customer? Our collection specialists and lawyers are happy to help you resolve your case. Feel free to contact us for more information. Do you no longer want to wait for your money? Then send us your invoice right away. Our specialists will immediately start working on your case.