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What are the Spanish Laws on Debt Collection?
In today's globalised world, businesses and individuals often find themselves engaged in cross-border transactions, that can become complex when it involves overseas debt collection. The laws and regulations surrounding debt collection in foreign countries can be complex and they vary from the UK and may be difficult to understand. However, Giambrone and Partners’ Spanish debt collection lawyers can assist UK businesses attempting to retrieve a debt from Spain.
This comprehensive guide will shed light on the Spanish laws relating to debt collection, providing insight into the main legal aspects, the process of collecting UK debts in Spain, the statute of limitations, necessary evidence, your rights as a creditor, and how Giambrone and Partners can assist in navigating these intricate matters concerning overdue debt.
Click on the links below to jump to that section:
Discover the main laws to be aware of when collecting debts in Spain
Find out whether you can collect a Spain owed in Spain from the UK
There are time limitations to debt collection in Spain
Discover the evidence needed when discussing your case with a Spanish debt collector
Here are your rights when collecting debts in Spain
Here is how we can assist
What are the Main Laws Surrounding Debt Collection in Spain?
Debt collection in Spain is governed by several key laws and regulations, including:
Ley 5/2015, de Fomento de la Financiación Empresarial: This law primarily focuses on promoting business financing, including debt collection regulations for businesses.
Ley 1/2000, de Enjuiciamiento Civil (LEC): The Spanish Civil Procedure Act lays out the legal framework for debt collection procedures through the Spanish courts. It outlines the various stages of debt collection, from filing a claim to enforcing a judgment. For any cases where the outstanding debt is above €2000, legal proceedings must be undertaken.
Código Civil (Spanish Civil Code): The Civil Code contains provisions related to civil obligations and contracts, which can be relevant to debt collection cases.
Ley 16/2011, de Contratos de Crédito al Consumo: This law governs consumer credit contracts and includes regulations that may be applicable in debt collection cases involving consumers.
More about the law surrounding debt collection in Spain, you can contact our multi-lingual, multi-jurisdictional Spanish lawyers here.
Can an outstanding UK Debt be Collected in Spain?
It is possible to collect a UK debt in Spain. However, may involve legal proceedings in both countries. To initiate debt collection in Spain, you may need to establish the jurisdiction under which the debt can be enforced to determine whether Spanish courts have jurisdiction over the debt. This depends on various factors, including the debtor's domicile, whether the jurisdiction is defined in the contract and the nature of the debt.
You may need to obtain a European order for payment; if the debt is undisputed, you can apply for a European Order for Payment, which is recognised across EU member states, including Spain. This streamlined procedure simplifies the debt recovery process. If the debt is disputed or exceeds the limits of a European Order for Payment, you may need to file a lawsuit in a Spanish court to obtain a judgment.
Once a judgment is obtained, you can enforce it in Spain through various methods, including asset seizure or wage garnishment. It is advised that you seek professional legal advice as soon as possible if you have an outstanding debt in Spain.
How Long Can a Debt be Pursued in Spain?
In Spain, debts have a statute of limitations, which determines how long a creditor has to pursue a debt through legal means. The statute of limitations for debt collection in Spain varies depending on the type of debt:
Personal Loans and Consumer Debts: These typically have a statute of limitations of 15 years from the due date.
Commercial Debts: Business-related debts usually have a limitations of five years from the due date.
Mortgage Debts: Mortgage-related debts have a longer statute of limitations, typically 20 years from the last payment.
It is crucial to be aware of these limitations as pursuing a debt after the statute of limitations has expired it will not be legally viable to purse the debt.
What Evidence do you Need to Provide when Instructing a Spanish Debt Collection Lawyer?
When instructing a Spanish debt collection lawyer, you must provide relevant evidence to support your claim. Key pieces of evidence may include:
The Debt Agreement: Provide a copy of the contract or agreement that outlines the terms and conditions of the debt.
Invoices and Statements: any invoices, statements, or receipts that show the amount owed, due dates, and any payments made.
Correspondence: Maintain a record of all communication between you and the debtor, including emails, letters, and phone call logs.
Proof of Delivery: If goods or services were delivered, keep evidence of delivery or service, such as signed delivery receipts or service completion documents.
Bank Records: Show proof of payments received or made in connection with the debt, including bank statements and transaction records.
Evidence of Default: If the debtor has defaulted on payments, provide documentation that demonstrates the default, such as late payment notices or bounced checks.
Ensuring you have a well-documented case can significantly strengthen your position in debt collection proceedings in Spain. At Giambrone and Partners, our debt collection lawyers can recover the debts owed to you, and advise you if court proceedings become necessary. We provide a wide range of services, including instructing a tracing agent and arranging enforcement should it be necessary. Our lawyers are multi-jurisdictional and understand Spanish law.
What Rights do I Have Concerning Debt Collection in Spain?
As a creditor pursuing debt collection in Spain, you have certain rights and protections under Spanish law. You have the right to initiate legal proceedings in Spain to recover the debt, subject to the jurisdiction of Spanish courts, as well as the right to request information about the debtor's assets and financial situation to assess their ability to repay the debt.
You may be entitled to claim interest on the outstanding debt and recover reasonable costs associated with your attempts to collect. Spanish law also encourages alternative dispute resolution methods, such as negotiation, mediation or arbitration, before resorting to litigation. Debt collection activities must comply with data protection and privacy laws, respecting the debtor's personal information. You have the right to appeal court decisions.
If your business has outstanding debt, you can find out more about the steps you need to take in our previous guide here.
How Giambrone and Partners Can Help
Navigating the complexities of debt collection in Spain can be demanding. Giambrone and Partners specialises in assisting clients with international debt collection across borders. Our experienced lawyers can provide you with comprehensive legal advice and representation, ensuring that your rights as a creditor are protected.
To find out more, or to arrange a consultation and take legal action, you can visit us here.
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