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A Comprehensive Guide to Spanish Debt Collection: What to Do, and What to Expect
If you have outstanding invoices in Spain but you reside in the UK, you may not know the best steps you should take for recovery or the laws you need to abide by, or whether or not you can retrieve the debt in the first place. Being owed debts can be a stressful situation, regardless of whether you are a business or individual. By instructing an experienced Spanish debt collection lawyers, you can ensure you can obtain any outstanding money you are owed as efficiently as possible.
In this guide, we will discuss the various laws surrounding Spanish debt collection, as well as how debts are collected in Spain, the different procedures to follow and why you should instruct a lawyer with knowledge and expertise in the judicial system in Spain to assist. We will also answer the question of how our team at Giambrone and Partners can help.
Click on the links below to each section:
Discover more about the laws surrounding Spanish debt collection
Find out how you can collect your debts from a Spanish debtor
Here are the various steps to follow when attempting to retrieve your debt
Instructing a lawyer can save you time, money and can ensure all legalities are adhered to
If you are owed money from a Spanish debtor, can you retrieve it from the UK?
What are the Spanish Laws on Debt Collection?
There are various laws surround debt collection in Spain, including:
Ley 5/2015, de Fomento de la Financiación Empresarial: this law focuses on promoting business financing
Ley 1/2000, de Enjuiciamiento Civil (LEC): The Spanish Civil Procedure Act highlight debt collection procedures through the Spanish courts, from filing a claim to enforcing a judgement. Legal proceedings must take place if an outstanding debt is above €2000.
Código Civil (Spanish Civil Code): This contains provisions related to civil obligations and contracts
Ley 16/2011, de Contratos de Crédito al Consumo: this governs consumer credit contracts, and could be applicable to debt collection cases involving consumers.
It is important to note, however, that debts in Spanish have time limitations. Personal loans and consumer debts have a time limitation of 15 years from the due date, commercial debts usually have a limitation of five years from the due date, and mortgage debts typically have time limitations of 20 years.
When collecting Spanish debts, if you have instructed a lawyer you must provide evidence to support the fact that you are owed money, which will assist the lawyer to help you retrieve the debts more quickly. Such evidence could include a debt agreement, invoices and statements, correspondence, proof of delivery and bank records. You have the right to initiate legal proceedings in Spain to recover the debt.
To find out more and the laws surrounding debt collection, you can read our previous guide here.
How are Debts Collected in Spain?
Before you attempt to collect debts in Spain, or instruct a Spanish debt collection lawyer, you must first attempt to negotiate with the debtor regarding the money owed. If you receive no response, a Spanish debt collection lawyer can send a formal demand for payment, setting a deadline. Legal action can be initiated if this is also ignored. Once a judgement is obtained against the debtor, various methods can be used to enforce it, such as bank account seizures.
You can take both judicial and extrajudicial routes when collecting debt in Spain. Extrajudicial debt collection is the first step, where debt collection lawyers act on your behalf and attempt a direct negotiation with the debtor. They attempt to resolve the debt amicably through telephone calls and letters warning that legal action will be taken if there is no response or resolution. If this fails, judicial routes are taken, which includes filing a lawsuit. Debt collection using negotiation alone can take several weeks to several months to complete, whereas judicial debt collection cases can last for over a year.
To find out more about collecting your debts in Spain, you can refer to our previous guide here.
What are the Spanish Procedures on Debt Collection
When starting the procedures for Spanish debt collection, a foreign creditor can assess the debt and acquire legal representation. You can then send a formal demand letter to the debtor, whether you are in the UK or Spain and initiate legal proceedings by filing a claim in the relevant Spanish court. If the court rules in favour of the creditor, enforcement proceedings may be initiated if the debtor fails to comply with the court order, to recover the debt through various means.
When collecting debts in Spain, you must adhere to various regulations, such as Spanish GDPR when handling debtor information. Creditors must also respect consumer rights, and communication with debtors must be conducted in compliance with these regulations. You can instruct a Spanish debt collection lawyer which will ensure you remain compliant. Jurisdiction is usually determined by the debtor’s location, but creditors can seek to change this through international treaties.
Read our previous guide to find out more about Spanish procedures on debt collection.
Do I Need a Lawyer for Spanish Debt Collection in Spain?
Whether you are instructing lawyers in Spain or the UK, there are different legal routes you can explore, such as negotiation, mediation, arbitration and, failing this, court proceedings. The Spanish legal system can be complex, so it is important to instruct lawyers who are qualified in that jurisdiction and can help you retrieve your debts as soon as possible. You also gain access to valuable expertise, with lawyers that understand the language to avoid communication barriers.
While it may be tempting to retrieve debts yourself, you may encounter issues if you are non-compliant with Spanish regulations and courts. Ineffective communication could lead to your debts not being retrieved, with heighted anxiety and stress affecting your case too. Our debt collection lawyers at Giambrone and Partners can assist you throughout your case.
Can Spanish Debts be Collected in the UK?
If you amassed debt in Spain but have subsequently moved to the UK, your debt will still follow you, and you can still be pursued by creditors. Fines and interest rates may also be added. Before Brexit, UK creditors could make a European Payment Order or use the European Small Claims procedure to recover debts from an EU country; now, debts must be recovered by the creditor themselves. If a Spanish court decides that you are owed money, the Hague Convention will apply, and the debtor will be forced to pay you what is owed.
Regardless of whether you are based in the UK but owed debts in Spain, or vice versa, you have a legal right to recover your debt, but you must instruct a debt collection lawyer. The owed debt must be a monetary debt; to claim through the Monitorio process, the owed debt must be less than €250,000, and you must provide documentation and evidence that a debt is owed. Evidence can include invoices, proof of signature on documents, and any documentation that shows the debtor was aware that a debt is owed.