Debt Collection Agency Portugal
Debt collection is an essential aspect of the financial industry.
Collecting debts in Portugal can be a time-consuming and challenging process, especially for those who lack the necessary knowledge and experience. As such, hiring a professional debt collection agency in Portugal can be a wise move. In this blog post, we will discuss the importance of hiring a professional debt collection agency in Portugal. In Portugal, debt collection has become increasingly challenging due to the country's economic situation. Unpaid debts can be a significant burden for businesses and individuals, leading to financial instability and even bankruptcy. Unpaid debts can be a significant burden for businesses and individuals, leading to financial instability and even bankruptcy.
The challenges of collecting debt in Portugal
The process of debt collection in Portugal can be complex and time-consuming. The country's legal system can be challenging to navigate, and the language barrier can be a significant obstacle for foreign businesses and individuals. Additionally, many people in Portugal are struggling financially, making it difficult to recover debt.
Moreover, debtors may be unwilling to pay or may even try to avoid paying altogether. They may hide their assets or move them to a different location, making the debt collection process even more challenging.
Advantages of hiring a professional debt collection agency in Portugal
Hiring a professional debt collection agency in Portugal has several advantages. Firstly, a debt collection agency has the necessary expertise and experience to handle debt collection cases. They understand the legal system and can navigate it more effectively than someone who is unfamiliar with it.
Secondly, debt collection agencies have access to resources that individuals or businesses may not have. For example, they may have access to databases that can help them locate debtors who have moved or changed their contact information.
Thirdly, a debt collection agency can help to maintain a positive relationship between the creditor and debtor. Debt collection agencies can act as mediators between the two parties and help to resolve any disputes that may arise.
Debt collection agency services in Lisbon (Debt collection agency Lisboa)
In Lisbon, there are several debt collection agencies that offer services to businesses and individuals. These agencies specialize in different areas of debt collection, including consumer debt, commercial debt, and international debt.
One such agency is Debt Collection Agency Lisboa. They have a team of experienced debt collectors who can help businesses and individuals recover their debts in a timely and efficient manner. They offer a range of services, including skip tracing, legal representation, and negotiation.
How to collect a debt in Portugal
The debt collection process in Portugal begins with a demand for payment. This can be done through a letter or email. If the debtor fails to respond or refuses to pay, legal action may be necessary.
The legal process in Portugal involves filing a lawsuit against the debtor. This can be done through the courts or through an arbitration process. If the judgment is in favor of the creditor, the court will issue an order for the debtor to pay the debt.
The legal framework for debt collection in Portugal
The legal framework for debt collection in Portugal is governed by the Civil Code and the Civil Procedure Code. These laws outline the procedures that must be followed when collecting debt and provide guidelines for debt collection agencies and creditors.
Under Portuguese law, debtors have a right to dispute the debt. If they do so, the creditor must provide evidence of the debt's validity. If the debtor fails to respond or disputes the debt's validity, legal action may be necessary.
Debt collection agencies vs. Lawyers for debt collection in Portugal
Debt collection agencies and lawyers both offer debt collection services in Portugal. However, they have different approaches to debt collection.
Debt collection agencies specialize in debt recovery and have a team of experienced debt collectors who can handle debt collection cases efficiently. They have access to resources that individuals or businesses may not have, such as skip tracing databases and legal representation.
Lawyers, on the other hand, specialize in legal representation and can provide advice on legal matters related to debt collection. They can file lawsuits on behalf of the creditor and represent them in court.
FAQ on debt collection in Portugal
Q: How long does the debt collection process take in Portugal?
A: The length of the debt collection process in Portugal depends on several factors, including the type of debt and the debtor's willingness to pay. Typically, the process can take several months or even years.
Q: Can a debt collection agency in Portugal collect international debt?
A: Yes, debt collection agencies in Portugal can collect international debt. However, they may need to work with debt collection agencies in other countries to recover the debt.
Q: Can a creditor take legal action against a debtor who is not in Portugal?
A: Yes, a creditor can take legal action against a debtor who is not in Portugal. However, the legal process may be more complex, and the creditor may need to work with debt collection agencies or lawyers in the debtor's country.
In conclusion, debt collection in Portugal can be a challenging and time-consuming process. Hiring a professional debt collection agency in Portugal can help businesses and individuals recover their debts more efficiently. Debt collection agencies have the necessary expertise and resources to handle debt collection cases effectively, and they can act as mediators between the creditor and debtor to maintain a positive relationship. If you need help collecting a debt in Portugal, consider using a professional debt collection agency like Debt Collection Agency Lisboa.
Amicable Debt Collections Portugal
1. General information
Once we have tried all amicable recovery actions (e.g. sending letters by mail to the debtor along with a fax, phone calls and emails) and it was not possible to collect the debt within 30 days, we will analyse whether it would be viable to file a lawsuit.
In that event, the case will be sent to a lawyer.
1.2. Local agents
At the present time, we are using our external lawyers’ service for visiting debtors in Portugal. Lawyers’ fees depend on the recovered amount, with a percentage fixed by contract applied.
We always need a prior approval from the client to entrust their case to a lawyer.
1.3. Interest
In amicable recovery, it is difficult to collect costs and interest from debtors. Should these costs be established in the client’s general conditions of sale (GCS), we will have a better chance of claiming them.
In the amicable phase, we can settle an agreement with or without interest, depending on the payment plan in place.
In legal proceedings, there is always interest to claim. Currently the interest rate is set at 8%.
1.4. Debt Collection Costs Portugal
Concerning the costs that the creditor can charge to the debtor, it is an indemnity no lower than EUR 200 for internal administrative collection costs, in spite of the right to prove other reasonable costs.
1.5. Prescription
According to Portuguese law, there are two prescription periods regarding invoices covering the supply of goods: An ordinary delay, which is 20 years (article 309 of the Civil Code) A delay of two years, which only applies to the traders’ credits resulting from goods sold to non-traders (article of the Civil Code).
1.6. Accepted and most common payment methods
Bank transfers to our bank account or our client’s bank account Cheques addressed to us or our client.
1.7. Types of companies
Sociedade Anónima or S.A.
The minimum corporate capital for these types of companies is EUR 50,000. Sociedade por Quotas or Lda In this case, the minimum capital is EUR 5,000.
1.8. Sources of information
In Portugal, we have access to Cosmopolite Crédito y Caución CCC) database, the credit insurance company of the group, and to our business information partner´s database, IBERINFORM, that include financial reports and risk evaluations of Spanish and Portuguese companies.
Using information from these reports, together with our own information (e.g. credit reports), we can get an accurate view of the debtor’s financial situation and advise on the next step of the process.
The information contained in these reports includes the official accounts in the recent years (P&L) that companies have to present annually, including volumes of sales, incomes and the likes.
After checking all the information, we advise on next steps and write a final report with a summary of all our efforts.
At this moment, if the traced debtor has a solvent company, has assets and is still open and trading, we will study the viability of legal action as the last resource.
2. Retention of title
According to the Portuguese civil code (Art. 409 – ‘Reserva de Propriedade’), it is possible to reserve the legal ownership of the goods to the supplier if the ownership is associated with a particular service or good – usually, the full payment of the goods in question – by incorporating in the contract a retention of title clause.
To be valid, such a clause has to be put down in writing and be expressly accepted by the buyer. If the buyer has not definitively accepted it, the clause may be disputed by the buyer, even at a legal level.
However, if the contract’s purpose is something subject to a registration (e.g. land or real estate), the retention of title clause will also have to be registered to be effectively enforceable against third parties.
Legally, the supplier, having sold goods with retention of title, is protected against the legal measures that may come to affect them. Such is the case in the executive or insolvency proceedings.
3. Safeguarding measures
In the scope of negotiations, we will always try to obtain a private document signed by the debtor recognising the debt.
The document can be signed by a notary, but normally this is not done due to the high costs for both parties; although it could be carried out in case of high amounts or per client’s request.
The main advantage of the document signed by the debtor is that it can be used in a future legal claim as proof.
Debtors are able to offer another form of security, such as mortgages, assignments of debts or bank guarantees.
4. Legal Debt Collections Portugal
4.1. General information
Through our lawyers´ network, we establish whether it is advisable to start legal proceedings. We evaluate if the cost is effective given the amount of the debt, compared to the amount of costs and time. We will assess the debtor’s solvency and activity. If the debtor is not trading nor has any assets, it makes no sense to prepare for possible legal action.
4.2. Required documents
In order to apply the legal proceedings, we need: A power of attorney Copies of Invoices CMR or any other documents that prove the merchandise or service delivery to the buyer Original cheques or bills of exchange issued by the debtor Any document signed by the debtor, in which the debtor acknowledges the debt Any other documentation shared between the parties.
4.3. Lawsuit
Once it is decided to start legal proceedings, we will determine what kind of legal proceedings it should be adequate to claim the debt. There are two types: ‘ Injunção’ (simple claim) – This kind of legal proceedings is used for undisputed debts, as it is faster and less expensive. ‘Injunções’ are for claims up to a maximum of EUR 15,000. ‘ Acção Declarativa’ (claim) – We use this legal proceedings when we expect strong opposition from the debtor, and, if the court issues a favourable judgment, we can execute with collection costs. In order to start legal action, a draft of a power of attorney will be prepared to be signed by the client. A notary’s involvement is not required in Portugal, but the document needs to be signed by the client and printed on headed paper.
4.4. Appeal
If a party disagrees with a judgment, they have the right to lodge an appeal to the immediate superior court. The most common appeal in Portugal is ‘Recurso de Apelação’ (676 Civil Procedure Code), which must be lodged within ten days from the notification of the original judgment.
4.5. Expected time frame
The average duration of a legal process depends on the kind of procedure and if the case is in the first instance or second. The ‘Injunção’ proceeding takes about three months. The ‘Acção Declarativa’ proceeding, can take more than a year to obtain the court’s judgment.
4.6. Interest and costs in the legal phase
Costs of the civil law procedure (court costs) are determined by the court and are not subject to any negotiation. All costs depend on the outstanding principal amount and are calculated based on percentages.
There is a range of different fees that can apply during the proceedings, dependent on the outstanding amount and a range of fees for each action.
This makes it difficult to predict the total cost. Costs of witnesses and experts may also arise, especially when there is a dispute.
A cost estimation can be provided on a case-bycase basis should legal action becomes necessary. In legal proceedings, interest will always be claimed.
5. Insolvency proceedings
5.1. General information
Whoever has a credit against the debtor (included their own debtors), may file for their insolvency, arguing that the debtor is in a situation not allowing them to pay their overdue obligations (providing relevant proof afterwards).
To prove a credit against the debtor, the applicant may provide invoices arguing default, unpaid bills of exchange or cheques.
The aim of the insolvency proceedings is to pay out all creditors with the same percentage of the debt value by liquidating the assets of the debtor company or collecting the enforceable income from the individual who is declared bankrupt.
5.2. Proceedings
Once the debtor has applied for insolvency and we know the insolvency proceedings’ data, we usually prepare a draft of the writ that our client must complete, sign and send to the practitioner or the court.
We send this writ by mail to our client with instructions on how to lodge their credit. In the event that the client wants us to lodge their credit, a specific power will have to be issued to enable us to act on behalf of the client in the insolvency proceedings.
In Portugal, there are 30 days after the official publication in the Official States Bulletin to lodge credits.
They will be included in the general list of creditors in the time frame established by law. Once the practitioner receives all claimed credits, they must present a payment plan that should establish the renegotiation of the principal with the unsecured creditors, the period over which the payments will be made and support requests from the unsecured creditors (suppliers), amongst other matters.
After that, a creditors’ meeting will deliberate on keeping the company in business, suspending the liquidation, keeping the company’s present management in office, and demanding the debtor to put forward an insolvency plan.
Proceedings take a long time, and normally creditors do not get paid from this kind of proceedings (it could be 40% for approximately seven to eight years). Of course, the proposal offered to the creditors will not start to be paid until two years after the termination of the legal proceedings, which means that the total time span could be ten years.
Processo de Revitalização (PER) PER is a special refinancing process to help companies with financial problems. Since its official publication by the court, creditors will have 20 days to communicate their credits.
A two-month (extensible to three) period will be open to negotiate an agreement to help the company’s financial restructuring. During this period, all other processes (lawsuits or insolvency requests) will be paralysed.
They will be activated again when PER ends. Negotiations can conclude with the approval or not of a recovery plan.
The process can also end due to the debtor not being able to reach an agreement, or because the three months for negotiations are exceeded without an agreement.
In these last two situations, the closure of PER will imply the debtor´s insolvency declaration within three days since the communication of the end of the negotiations.
5.3. Required documents
In order to lodge a claim on behalf of our client, we need:
-A power of attorney
-Copies of invoices
-Updated statement account of the debt
-Any document signed by the debtor, in which the debtor acknowledges the debt.
5.4. Expected time frame and outcome
The deadline to lodge claims after the publication in the Official State Gazette is one month.
The whole duration of an insolvency proceeding is between two and ten years.
Portugal is a country located in southwestern Europe. Its capital city is Lisbon. Portugal is divided into 18 districts and 2 autonomous regions. The government system of Portugal is a unitary parliamentary democratic republic. The official language of Portugal is Portuguese, and the currency is the Euro.
Collecting debts in Portugal can be challenging for foreign businesses due to a number of factors, including the country's economic and political instability, the complexity of the legal system, and the difficulty of enforcing judgments. There are a number of debt collection agencies operating in Portugal, and the industry has been in existence for several decades.
The national credit bureau in Portugal is the Central de Informação de Risco de Crédito, and some of the private credit reporting companies operating in the country include CRIF, Equifax, and Experian. Debt collection laws in Portugal are generally uniform throughout the country, although local laws may sometimes apply.
There are several benefits to using commercial debt collection services for Portugal:
- Expertise: Debt collection agencies have specialized knowledge and experience in recovering debts, which can be particularly useful for foreign businesses that may not be familiar with the local legal and cultural environment.
- Efficiency: Debt collection agencies can often recover debts more quickly and efficiently than businesses can on their own, as they have the resources and expertise to pursue multiple avenues for recovery.
- Cost-effectiveness: Using a debt collection agency can be more cost-effective than trying to recover debts on your own, as you can avoid the time and expenses associated with pursuing legal action.
- Risk reduction: Debt collection agencies can help to reduce the risk of non-payment by providing credit risk assessment and monitoring services.
- Language skills: Multi-lingual debt collectors can communicate effectively with Portuguese debtors, which can be particularly helpful for foreign businesses.
- Local presence: Debt collection agencies with local presence and knowledge of the local legal and cultural environment can be more effective at recovering debts in Portugal.
- Online services: Many debt collection agencies offer online tools and services, such as 24/7 debt recovery report websites, which can be convenient and efficient for creditors.
Our debt recovery agency has a very high success rate in Portugal thanks to our multi-lingual debt collectors located in the country and our 24/7 online debt recovery report website. We have local debt collection managers in the cities of Lisbon, Porto, and Coimbra.
