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A complete guide to Portuguese debt collection: How international lawyers can help with cross-border debt collection in Portugal
In today's global economy, understanding the complexities of overseas debt recovery in various jurisdictions is vital for businesses and creditors alike. Portugal, with its unique legal framework and cultural dynamics, presents both challenges and opportunities in debt collection efforts.
This guide will summarise all the relevant information in relation to Portuguese debt collection including how a debt collection lawyer (Advogado) can help and when they are beneficial.
Click on the links below to jump to that section:
Discover the different situations in which a debt collection lawyer will be beneficial in Portugal.
Find out about ADR is, services including, and when it should be sought when dealing with Portuguese debt collection.
What a foreign national should know about the choice of jurisdiction when pursuing Portuguese debt collection.
Find out the advantages of instructing lawyers during Portuguese debt collection.
Read the most common queries on Portuguese debt collection.
When do you need a lawyer for debt collection in Portugal?
If you are owed debts from a Portuguese resident or business based in Portugal, debt collection services may be required. Ensuring that you seek expert legal advice to assist you through this difficult situation is essential, particularly in the following scenarios:
Ignored warning letters: In Portugal, it is expected that debts are paid within 30 days of receipt.
Language barrier: Portuguese debt collection lawyers provide language support and ensure that you are fully aware of the legal nuances and obligations.
If you are a British national: In the European Union (EU), the development of the European Payment Order (EPO) development streamlined the process of creditors claiming debts across EU member states, like in Portugal, which now no longer applies to the UK.
For more information, read our expert guide on choosing Portuguese debt collection lawyers (Advogados) here.
How is Alternative Dispute Resolution conducted in Portugal?
Alternative Dispute Resolution (ADR) offers alternative options for creditors looking to recover debts without instigating court proceedings, taking the dispute through arbitration centres, mediation services, and the Justices of Peace (Julgados de Paz) for smaller debts.
For debt collection in Portugal, it is important to be aware of certain ADR practices:
The Alternative Dispute Resolution Office - (Gabinete de Resolução Alternativa de Litígios)
The Portuguese Arbitration Act
The Mediation Law
There are many benefits to pursuing ADR when recovering debts in Portugal. For example, this process is a cost-effective alternative as opposed to proceedings through the Portuguese courts and a much faster process.
For more information, read our expert guide on ADR in Portugal, including when it is needed, and the importance of using debt collection lawyers, here.
Debt collection and jurisdiction in Portugal
Typically, jurisdiction in a debt collection case lies with the courts where the debtor is located rather than the creditor, unless there are jurisdiction clauses in the initial contract. Therefore, if your outstanding debt lies in Portugal, the Portuguese courts will have precedence over the jurisdiction.
A UK national can enforce and pursue a debt in Portugal under certain conditions. A judgment must be obtained in the UK, and you can then seek to enforce that judgement in Portugal. There are two legal avenues a foreign creditor can take:
European Small Claims
European Order for Payment Procedures
Giambrone's Portuguese Abogados will support you whether court proceedings take place in Portugal or the UK.
What are the benefits of instructing a Portuguese debt collection lawyer?
Although it is possible to retrieve debts on yourself, it is not advisable. Legally, retrieving debts from Portugal can be a complex process that has many regulations and laws to adhere to.
For debt collection in Portugal, expert legal advice is extremely beneficial to increase the success rate of recovering debts. Portuguese debt collection lawyers have in-depth knowledge of local laws, regulations, and procedures related to debt collection.
They also specialise in handling debt-related matters and have experience in communicating and negotiating with both creditors and debtors. If you do not speak Portuguese, an international multi-lingual debt collection lawyer will act on your behalf and providing you complete clarity during the recovery process.
Instructing a debt collection lawyer can expedite the debt recovery process and litigation, saving you time and resources.
For more information, read our expert guide on the benefits of using a lawyer for debt collection in Portugal here.
Frequently asked questions
What are the best practices for debt collection in Portugal?
Debt collection lawyers in Portugal employ various strategies to recover debts, adjusting their approach to the specifics of each case. This includes alternative dispute resolution (ADR) techniques such as arbitration.
If this unsuccessful, Portuguese debt collection lawyers (Advoagdos) will determine whether legal action is a viable option, comparing the debtor’s financial strength against the likelihood of settlement.
How long can a debt be chased in Portugal?
The limitation period for recovering Portuguese debts can vary depending on the nature of the debt. Time limits can vary in Portugal between five and twenty years. Due to these complexities, it is vital that foreign nationals seek international legal advice from Portuguese debt collection lawyers to help resolve matters.
If you require more information on debt collection in Portugal, or would like to request a callback, contact Giambrone & Partners below.
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