How to claim unpaid invoices (part I)
Unpaid invoices are an interrogative that torments any small Company or any sole trader because the non-payment of invoices can suppose a closing of the business because lack of liquidity.
In this post, we are not going to give you a miraculous formula to solve this problem, but we are going to explain you which one, until this moment, it is the most efficient tool against non-payments, although, logically, it not always accomplishes its objective.
How to claim unpaid invoices?
“El procedimiento monitorio” (Payment proceedings)
“El monitorio” is a procedure that was introduced in Spain in 2000, after knowing about the efficiency of it in other countries. It consists in a special judicial procedure to claim debts quickly and easily. Having said that, it seems that this procedure is “the great solution”, but before drawing conclusions we invite you to read the whole post.
It is regulated in article 812 and the following of Civil Procedural Act (CPA) and his purpose is set out in the Explanatory Memorandum of the Law, which it says that Legislation entrusts that with these proceedings, it could be achieved a fast and efficient protection of the creditors of those liquid monetary debts to their debtors, specially, for professionals and small Companies.
For that, this procedure has as a primary goal to protect the creditors for achieving an early resolution for the satisfaction of his debts.
Currently, this is the most used procedure in litigation in Spain, and since 2011, there is no limit in the amount of the claim, so it is possible to claim according to this procedure, regardless of the amount of the debt.
Short summary of “procedimiento monitorio”
In the following paragraphs we are going to explain you in detail the features of this procedure, but before that, we want to give you a simple scheme in order to provide you a general idea of the processing:
Non judicial claim (registered letter with certification of the content) –> Judicial claim (monitorio) –> Injunction is served to the debtor (20 days for paying or for objecting to the claim) –> If the debtor does neither pay nor object –> We can seize the assets and rights of the debtor in order to satisfy our credit.
- PARTICULAR CHARACTERISTICS OF THE “MONITORIO” WHICH MAKE IT A SUMMARY PROCEDURE
2.1. Possibility of claiming a group of debts in a sole procedure, even if they have different origin.
Through this procedure, if the debtor has various debts, the creditor can claim them jointly, even if the debts have origin in different contracts, provided that they aren’t incompatible with each other and they comply with the requirements that are set out in article 812 CPA.
2.2. It’s only necessary to present slightest proof for admitting the claim.
Judges assert it is enough that in the lawsuit the claimant presents slightest proof of his right and not the fully proof of it, because if so, it would not be necessary the trial, and it would not be possible the objection of the debtor. It is certain that article 812 CPA says that the claimant must provide proof of the debt, but it is also true that article 815.1 CPA says that it is sufficient for admitting the claim and the following injunction that the documents which are presented with the lawsuit represent slightest proof.
2.3. Possibility of reaching enforcement stage without celebrating a trial
Once we start legal action with the “monitorio lawsuit”, an injunction is inmmediately served to the debtor, requiring him to pay the amount we are filing for, and the debtor has twenty days to either pay or object to the petition, explaining the reasons why.
In case of the debtor does neither answer nor object to the claim, a writ is directly issued by court, allowing the claimant to start with enforcing stage and pointing out the assets and rights of the debtor that can be seized in order to satisfy the credit.
- REQUIREMENTS AND PRECONDITIONS OF THE DEBT TO START A “MONITORIO” PROCEDURE IN ORDER TO CLAIM FOR UNPAID INVOICES
- Debts must be monetary. Value debts or obligations to do something or give something are excluded.
- Debts must be due, liquid and enforceable, in relation to the documentation which is attached to the claim; in other words, the documentation attached with the claim must evince the same quantity that we are filing for. There is liquidity when we file for a specified and certain quantity, and it can be fixed by simple arithmetic operations, although we add interest to it.
- CONTENT OF THE LAWSUIT AND DOCUMENTATION ATTACHED
- In the claim we must set out the facts which are the origin of the debt (contract for the sale of goods or contract for services).
- We must attach the documents that evince the debt (bills, delivery note, financial accounting general ledger, accounting events, private document of recognition of the debt by the debtor, etc.). It is advisable to present original documentation, because in lots of cases, the lawsuit is not admitted by the court if we present photocopies.
- It is recommended to do a previous non judicial claim, which we will attach also with the lawsuit, in order to demonstrate the reticence of the debtor in paying the debt, and at the same time, this is useful to demonstrate that the debt is due and enforceable.
- Finally, it should be also mentioned that to start legal action with the “monitorio lawsuit” it is not necessary legal assistance of a lawyer and a procurator.
However, in the event of the debtor does not pay and we have to start enforcement stage, or if the debtor objects to the claim and the quantity of the lawsuit is up to 2.000 euros, it will be compulsory legal assistance of both professionals, for that, is advisable to conduct the whole procedure, since the beginning, with legal assistance.