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The non-payment of commercial debts is a common contingency in commercial transactions. Its most immediate effect is the impairment of the creditor company’s cash flow. Furthermore, managing a non-payment requires investing time and internal resources that should be allocated to generating value and growth for the company.

The purpose of this document is to serve as a guidance mechanism for any company facing this situation, explaining the steps to take and essential legal considerations that must be taken into account to manage debt recovery in Spain.

Phase 1: Preliminary Debt Assessment.

Before initiating any recovery action, it is essential to conduct a prior analysis of the credit right.

A credit is a right, and as such, it must be exercised (claimed) to become liquid. This phase will lay the foundations upon which the future recovery strategy will be built, allowing for the maximization of resource savings.

1. Debt Audit: Is it liquid, due, and enforceable?

For a credit right to be judicially claimable, it must be a liquid, due, and enforceable debt. This means that its amount must be clearly determined, the payment term must have expired, and there can be no condition preventing its claim. We break it down:

• Liquid: The amount must be determined or easily determinable through a simple arithmetic operation.
• Due/Matured: The term for voluntary payment has expired.
• Enforceable: It is not subject to any suspensive condition nor has it prescribed (statute-barred).

Without a debt that meets these three characteristics, there is no right to collection that can be legally defended.

The key to Mthese points lies in building a solid evidentiary dossier. It is essential to gather and organize:

• Signed Agreements/Contracts: The document that originates the commercial relationship and regulates the obligations of the parties, as well as all its possible annexes, must be located.
• Invoices: They must specify the description, amount, and due date, as well as prove that they have been sent and duly received by the debtor.
• Signed/stamped delivery notes, work or service certifications: They prove the correct delivery of the product or provision of the service.
• Proof of conformity/acceptance: Any manifestation or communication that demonstrates the receipt and acceptance of the product or service by the debtor. One of the main reasons for opposing debt payment is that the product or service has not been received – whether true or not – therefore, it is so important to prove that the creditor has fulfilled the obligation that originated the invoice and, consequently, the right to collection.
• Acknowledgment of debt: Any communication sent by the debtor or document from which an acknowledgment of owing the outstanding amount can be inferred.

Monitor the statute of limitations for the debt.

In general, time diminishes the value of credit rights. The more time that passes between a debt’s due date and its claim, the less value the credit has. This is why we speak of new or old debt, to the extent that after a certain period without being claimed, its value is partially or totally reduced.

A legally time-barred debt loses its judicial enforceability, becoming a “natural obligation” whose fulfillment is left to the debtor’s discretion. Therefore, it is vital to verify the elapsed time periods:

• General term: Under general Spanish law, the period to claim commercial debts is five years from the invoice’s due date.
• Regional, sectoral, and specific legislation: For example, in Catalonia, the general term is ten years for most claims and debts, although this can vary. Specific regulations, such as those for the land transport of goods, establish different periods. Likewise, there are also types of debts with different statutes of limitations, such as the general three-year period for claiming professional fees for lawyers, notaries, experts, etc., calculated from when the services ceased to be provided, according to Article 1967.1 of the Civil Code.

If the period is close to expiring, the statute of limitations must be interrupted to restart the clock. Sending a burofax is the most common method, and you must verify that you have a proof of sending and properreception by the debtor to maximize its effectiveness.

3. Determine whether the debtor is a natural person or a legal entity and ascertain their solvency level.

Along with the “age” of the credit, the debtor’s solvency is one of the most influential factors in valuing a credit right. Knowing the debtor’s legal nature and any information about their solvency is crucial for assessing the real guarantees of collection and devising the best strategy to follow.

As a general rule, natural persons follow the principle of universal liability, responding to any debt with all their personal assets, present and future, which may extend to their matrimonial property regime.

Regarding legal entities (S.L., S.A., etc.), they limit their liability to the corporate assets, meaning that the personal assets of partners and administrators are, in principle, protected. Of course, in cases of fraud or abuse of that legal personality by the debtor, the law provides the creditor with several actions to hold partners or administrators liable with their personal assets.

In both cases, it is advisable to conduct a preliminary solvency analysis, even if it is of an initial nature.

While the asset information that can be obtained in the extrajudicial phase is limited, the legal system and the market offer legitimate ways to gather relevant data on the debtor’s financial status, whether a natural person or a legal entity, for example:

• Consulting the Property Registries, which allows for the verification of real estate ownership in the debtor’s name throughout the national territory.
• Obtaining commercial reports through specialized platforms, which can provide valuable information on the economic and financial situation of legal entities, as well as natural persons operating as self-employed individuals.
• In relation to legal entities, also consulting the Commercial Registries, which allow access to information related to the company’s annual accounts, provided they have been filed in due time and form, as well as certificates of ownership and/or the content of the current articles of association.

4. Determine the cause of non-payment.

Understanding the reason behind the non-payment of the debt to be claimed directly impacts the strategy to be followed. Based on our professional experience, the main causes are usually the following:

• Mere oversight or administrative negligence: In scenarios where there is no intention of non-payment on the part of the debtor, but rather it is due to administrative or operational deficiencies. In these cases, sending an amicable letter is usually the most efficient tool to unblock any payment. This recovery action, whether internal or outsourced to debt recovery professionals, formally reminds the debtor of the outstanding obligation and, in most cases, regularizes the situation without the need to escalate to litigation.
• Lack of liquidity or debtor insolvency: Within this cause, different types of debtors can be found:

1. 1. The debtor with willingness to pay but facing cash flow problems: Occasionally, the debtor maintains the willingness to pay (animus solvendi), but is experiencing temporary cash flow difficulties that prevent them from fulfilling their commitments within the agreed timeframe. In this case, debtors are usually more receptive to resolving the situation through an amicable negotiation, and it is common for them to request a deferral or a renegotiation of the terms.
   2. The debtor in de facto insolvency: This represents the next level. The debtor does not necessarily intend to default, but financial difficulties can worsen, leading to a generalized breach of their obligations. Even if the debtor has not formally initiated insolvency proceedings, they are in a state of de facto insolvency that requires more proactive action from the creditor. It is often advisable to address the situation through a debt acknowledgment agreement that includes a partial waiver, so that the creditor can secure, at the very least, the recovery of part of their credit.
   3. Debtor in Insolvency Proceedings: This represents the final level. This is the most complex scenario and occurs when the debtor has already been declared in insolvency proceedings. The creditor usually becomes aware of this situation through official communication from the Insolvency Administrator or through the publication of the declaration order in the Official State Gazette (BOE).

Regarding this last scenario, our firm has already published a creditor action protocol to maximize the probabilities of credit recovery. You can find more information in the following Article.

• Disagreement with the Service or Product: If the debtor alleges non-compliance as a way to evade payment, it is highly probable that the claim will turn into a dispute. Therefore, the strategy must focus, from the outset, on deactivating the arguments of opposition, gathering all means of proof to demonstrate the correct fulfillment of the service or provision by the creditor and preparing for future judicial proceedings, for example: (i) Communications (emails, messages) where the debtor shows conformity or expresses no complaint during the provision of the service; (ii) reception or conformity certificates signed without objections, or (iii) expert reports that validate the quality of the work performed.

Finally, and regardless of the cause of non-payment, having an express acknowledgment of debt is an invaluable asset.

A simple email, a WhatsApp message, or any document where the debtor admits the existence and amount of the debt completely transforms the scenario, simplifying the creditor’s burden of proof and weakening any possible future opposition from the debtor.

Detecting and safeguarding these communications is one of the most important tasks in the preparation phase, as it significantly smooths the path towards recovery.

Phase 2: Out-of-Corut Debt Recovery: ADRMs as a Procedural Requirement for Filing a Potential Lawsuit.

Unlike the regulatory framework prior to April 2025, where sending an amicable letter was a strategic but not mandatory option, the entry into force of Organic Law 1/2025, of January 2, on measures regarding the efficiency of the Public Justice Service (hereinafter “LO 1/2025”) has transformed the scenario. As of April 2025, this law establishes the attempt at prior negotiation as a procedural requirement for any judicial claim to be admitted for processing.

To comply with this obligation, the law articulates a series of appropriate dispute resolution mechanisms (ADRMs), among which the following stand out:

• Formal out-of-court claim and direct negotiation: This involves sending a reliable communication (such as a burofax) to the debtor, urging payment and opening a channel for negotiation. This act not only documents the attempt at agreement but also interrupts the statute of limitations for the debt. If an agreement is reached, it can be formalized in a private document.
• Mediation: This is a confidential and voluntary process in which a neutral and impartial third party—the mediator—facilitates communication between the parties so that they can reach an agreement themselves to end the dispute. The mediator does not impose a solution but guides the negotiation.
• Conciliation before the Court: This is a procedure that allows parties to attempt to reach an agreement in court, but without the need to initiate contentious litigation. If an agreement is reached, the Court formalizes it through a decree that has the same force as a judgment, meaning it is an enforceable title.
• Negotiation before a Public Notary: The parties can formalize a payment agreement or a debt recognition before a notary public. This mechanism offers high legal certainty, as the notarial document enjoys public faith. In accordance with Article 12 of LO 1/2025, the agreement can be elevated to a public deed, becoming an enforceable title that allows direct recourse to enforcement proceedings in case of non-compliance.
• Confidential binding offer: According to Article 17 of LO 1/2025, the creditor can present a formal and confidential proposal for an agreement with the debtor. If the debtor expressly accepts it, the agreement is irrevocable and binding. If the debtor rejects it or does not respond within one month, the procedural requirement is deemed fulfilled, and the creditor can file the judicial claim.

The choice of the most appropriate ADRM must be based on the information obtained during the preliminary diagnosis of the debtor and the nature of the debt.

For example, if the creditor faces a debtor who acknowledges the debt but is experiencing temporary liquidity strains, some interesting options may be to conclude a private and/or notarized debt recognition and payment schedule agreement.

On the other hand, if the non-payment is due to a conflict over the service provided or a substantive disagreement where the debtor actively opposes payment, some interesting avenues may be direct negotiation through a reliable demand, mediation, or the formulation of a binding offer if the process is to be expedited.

Phase 3: Filing a Judicial Claim.

If the Alternative Dispute Resolution Mechanisms (ADRMs) have not been successful, or if the nature of the debt and the debtor’s attitude make it advisable to initiate legal proceedings (once the procedural requirement has been met), it is time to go to court.

The Spanish legal system offers various procedural options for debt collection. The choice of the most appropriate procedure will depend on the information obtained during the previous phases.

1. Summary Payment Order Procedure (Procedimiento Monitorio).

This is an agile and simplified procedural instrument designed for the collection of monetary, liquid, determined, due, and enforceable debts that can be documented. Its main advantage is that it allows to obtain an enforceable title “very quickly” if the debtor does not oppose it.

The phases of the procedure are as follows:

• Initial Claim/Petition: The procedure begins with a written document (petition) that identifies the creditor and debtor, and details the origin and amount of the debt, as well as the ADRM used and its outcome. Documents proving the debt (invoices, delivery notes, contracts, etc.) must be attached to this petition.
• Admission and Payment Demand: Once the petition is admitted, the Court will send the petition to the debtor and, within a period of twenty working days from the day following the notification, the debtor can either pay the debt or file a written statement of opposition.

In response to the demand, the following scenarios can occur:

• Scenario 1: The debtor pays. In this case, the procedure concludes successfully. The Court orders the payment to the creditor of the amount deposited in the court’s account and closes the case.
• Scenario 2: The debtor neither pays nor opposes within the 20-working-day period. In this case, the Court will issue a decree terminating the process. This decree automatically becomes an enforceable title, allowing the creditor to immediately request the initiation of enforcement proceedings to seize the debtor’s assets.
• Scenario 3: The debtor files a written statement of opposition within the deadline. The summary payment order procedure ends, and the claim is converted into the corresponding declaratory procedure based on the amount of the claim:
  • Summary Trial (Juicio Verbal): If the debt does not exceed €15,000. In this case, the plaintiff will be given a 10-day period to challenge the debtor’s opposition. If the parties have not requested a hearing, the case will be ready for judgment.
  • Ordinary Trial (Juicio Ordinario): If the debt exceeds €15,000. In this case, the plaintiff will have one month to file an ordinary trial lawsuit. If they fail to do so within that period, the Court will close the proceedings and order the plaintiff to pay the procedural costs.

It is crucial to note that a key element for the success of the summary payment order procedure is the correct location of the debtor, as the procedure can be frustrated if:

• It is not possible to serve the payment demand at the indicated address, and,
• After the court conducts address inquiries, it is confirmed that the debtor has no other addresses or resides in a different judicial district.

In both cases, the judge will issue an order dismissing the proceedings (a resolution that does not prevent a subsequent claim from being filed). This highlights the importance of the prior diagnostic work to confirm the debtor’s contact details and avoid unnecessary delays and costs.

 What to do after a favorable resolution?

If a favorable resolution is obtained (either due to the debtor’s failure to appear or a judgment in your favor after opposition), it will be necessary to initiate an enforcement proceeding to enforce collection through the seizure of their assets.

When is the intervention of a lawyer and procurador mandatory?

To file the initial petition for the summary payment order procedure, the intervention of a lawyer and a procurador is not mandatory, regardless of the amount. However, if the debtor opposes, the intervention of a lawyer and procurador will be mandatory whenever the claimed amount exceeds €2,000.

Likewise, to request the enforcement of a favorable resolution, the intervention of these professionals will be mandatory if the amount for which enforcement is sought exceeds €2,000.

What costs can a summary payment order procedure entail?

 The main costs, depending on the specifics of the case, will be: lawyer’s fees, prcouradors’s fees, and court fees.

• Lawyer’s fees will depend on the agreement/offer made by the chosen professional, which can range from a fixed fee to a full success-fee formula (“no win, no fee”), or a mixed formula that includes a fixed fee plus a success fee on the recovered amount.
• Procurador’s fees are subject to official tariffs and are generally calculated based on a scale according to the amount of the claim. There are various online portals with calculators that can provide an approximate idea of their fees based on the procedure’s amount.
• Court fee: Individuals are exempt from paying the court fee. For legal entities, the amount is €100, although a small discount is applied for electronic payment.

Is it possible to recover the costs invested in the claim?

Resolutions that end the summary payment order procedure because the debtor pays the debt or does not oppose the claim do not usually include a ruling on costs.

2. Summary Trial (Juicio Verbal).

This is the ordinary declarative procedure for claims for amounts not exceeding 15,000 euros.

The phases into which it is divided are as follows:

• It begins with a written claim, to which all documents supporting the claim must be attached.
• Once the claim is admitted for processing, the defendant is notified and has a period of ten working days from the day following notification to respond in writing.
• If the parties request it or the judge deems it necessary due to a dispute over the facts, a hearing (oral trial) will be convened where the admitted evidence will be presented (interrogations, witnesses, experts) and conclusions will be stated.

However, if the discussion is purely legal or there is no need to present evidence, the judge, by their own decision or at the request of the parties, may issue a judgment directly without holding the hearing.

What happens if the debtor cannot be located and the claim cannot be served?

If it is not possible to serve the claim on the debtor at the known addresses (provided by the claimant or obtained through a domicile investigation carried out by the court), the court will declare them in procedural default. The procedure will continue without their presence until they appear, and subsequent notifications will be made by edicts published on the Single Judicial Edict Board (Tablón Edictal Judicial Único).

Are the judgments rendered appealable?

Judgments rendered in an oral procedure are appealable before the Provincial Court, unless the amount of the claim does not exceed 3,000 euros, in which case the judgment is final from its issuance and no appeal is possible.

What to do after a favorable ruling?

If the judgment becomes final, either in the first or second instance, and the debtor does not voluntarily comply within the following 20 working days, the claimant may initiate an enforcement proceeding.

When is the intervention of a lawyer and procurador (court representative) mandatory?

Their intervention is mandatory whenever the amount of the claim exceeds 2,000 euros. Below that figure, the parties may appear on their own behalf.

What costs can an summary procedure (Juicio Verbal) entail?

• The main costs, as in the monitorio (order for payment) procedure, will be: lawyer’s fees, procurador’s fees, and court fees.
• Regarding lawyer’s and procurador’s fees, the same considerations apply, depending on the offer made by each professional.
• As for court fees, natural persons are exempt from paying them in the declarative phase of the monitorio procedure. For legal entities, the amount is €150, although a small reduction applies if paid electronically. Claims under €2,000 do not generate an obligation to pay court fees.

Depending on the specific matter, other costs may arise, such as the preparation of an expert report or the request for a sworn translation, etc. The cost will depend on the offer made by the chosen professional.

Can the costs invested in the claim be recovered?

In the event of obtaining a fully favorable judgment, the general rule is that the court will order the defendant to pay the procedural costs incurred by the claimant, which include lawyer’s fees, procurador’s fees, court fees, and any other costs that may have been incurred (expert report, translations, etc.).

3. The Ordinary Procedure (Juicio Ordinario)

This is the standard declarative procedure for claims exceeding 15,000 euros.

The phases of the procedure are as follows:

• Claim and Answer: The procedure begins with a formal and detailed claim. The defendant has a period of twenty working days, starting from the day after receiving it, to submit a written answer.
• Preliminary Hearing: After the answer is submitted, the parties are summoned to an in-person hearing at the court. Its purpose is to attempt an agreement between the parties, resolve procedural issues, establish the disputed facts, and propose and admit the evidence to be presented at trial. Due to its instrumental nature, usually only the lawyers and procuradores of each party attend this hearing.
• Trial: This is the oral hearing where the evidence admitted in the preliminary hearing is presented (interrogations, witness testimonies, expert reports) and the parties orally present their conclusions. A trial may not be necessary in cases where the evidence proposed in the Preliminary Hearing consists solely of documents. In such cases, the procedure is directly set for judgment.
• Issuance of Judgment.

What happens if the debtor cannot be located and the complaint cannot be served?

Similar to the verbal procedure, if it is not possible to serve the complaint to the debtor at any known addresses, they will be declared in procedural default. The procedure will continue without their presence until they appear, and subsequent notifications will be made by edicts published on the Single Judicial Edict Board (Tablón Edictal Judicial Único).

Are the judgments issued appealable?

Yes.

When is the intervention of a lawyer and procurador mandatory?

It is always mandatory for both parties, regardless of the amount of the claim.

What costs can an ordinary procedure entail?

 In this case, the same considerations as for the verbal procedure would apply, with the exception that the amount of the judicial fee for legal entities is higher: €300, unless the amount of the procedure is less than €2,000. In the latter case, no judicial fee payment is required.

Phase 4: Forced Enforcement of a Favorable Judgment.

Obtaining a favorable judgment is the milestone that confirms the creditor’s right to collect their credit. However, the process does not always end there. If the debtor does not voluntarily comply with their payment obligation within the legal term (20 days from the date the judgment becomes final), it is necessary to initiate an enforcement procedure.

The enforcement procedure must be initiated before the same judicial body that heard the case in the first instance. In it, the Court will be requested to issue an enforcement order for the amount recognized in the judgment (principal), plus accrued interest and an additional amount, provisionally set, to cover the interest and costs generated during the enforcement itself. This amount cannot exceed 30% of the principal claimed.

The phases of the enforcement procedure are, as a general rule, the following:

• Issuance of the enforcement order: The Court, after examining the claim, issues a Court Order containing the general enforcement order. Immediately thereafter, the Court issues a Decree specifying the enforcement measures to be adopted.

At the request of the creditor, or ex officio, the Court will use the telematic tools at their disposal to locate the debtor’s assets and rights (bank account balances, vehicles, real estate, tax refunds, etc.). Once sufficient assets are located, they are attached (embargoed) to guarantee payment of the debt.

• Forced realization of assets: The attached assets are converted into liquid money to pay the creditor. The most common method is a judicial public auction, although other forms also exist, such as a realization agreement or realization by a specialized person or entity.
• Payment to the creditor: With the attached money or that obtained after the forced realization of assets, the enforcing party’s credit is satisfied, covering principal, interest, and costs.

What costs are associated with the enforcement of a judgment?

It is important to note that forced enforcement generates additional costs (attorney’s and procurator’s fees, appraisal experts, publications on auction portals, etc.). The general rule is that all these expenses are borne by the enforced party (debtor) and are added to the principal amount owed.

What happens if, despite everything, the enforcement is unsuccessful?

One of the most frustrating scenarios for the creditor is when, after the asset investigation, it is confirmed that the debtor lacks assets or those they have are insufficient to cover the debt. In this case:

• The enforcement is not closed (archived), but remains open, and the debt remains fully valid.
• The creditor can periodically request the Court (for example, every six months or annually) to conduct a new asset investigation to check if the debtor’s economic situation has improved.
• If at any future time the debtor acquires assets or rights (an inheritance, a new job, a lottery prize, etc.), these can be immediately attached within the already open enforcement procedure.

Furthermore, if the insolvent debtor is a company, the unsuccessfulness of the enforcement opens the door to other avenues to pursue the credit, among which stand out:

• Demand for personal liability from directors: Under certain legal assumptions (such as not having promoted the dissolution of the company when there was a legal cause for it), it is possible to sue the directors to make them liable with their personal assets for the company’s debts. This is a complex topic that would be subject to an independent analysis.
• Request for compulsory insolvency proceedings: The creditor can request the declaration of insolvency proceedings for the debtor company, a universal procedure that seeks the orderly liquidation of the company’s assets to pay all its creditors.

In short, enforcement is a long-term tool that allows the creditor to keep their claim alive indefinitely, awaiting the debtor’s financial situation to eventually allow for the satisfaction of their credit.

A. How long can judicial proceedings last?

This is one of the most frequently asked questions and, at the same time, one of the most complex to answer accurately. The duration of a judicial proceeding is not an exact science and is subject to multiple variables beyond the control of the parties.

Firstly, the duration will depend on the type of procedure initiated. By their very nature and procedural design, a payment order procedure or a juicio verbal usually have a more agile processing and are generally faster than a juicio ordinario (ordinary trial), which is conceived for matters of higher value or complexity and includes more extensive procedural phases.

However, the most determining factor, which introduces greater uncertainty, is the workload and resources of the specific court that must hear the case. Each judicial district has its own courts, and each of them operates independently, with its own agendas, staff, and resources. Therefore, the speed of the process will largely depend on the saturation of that court and the efficiency of its team.

This reality can lead to situations as disparate as an identical juicio verbal being resolved in eight months in one court within the same judicial district, while in a neighboring court, the processing extends up to fourteen months. It is essential to understand that this estimate is offered purely as an example and is not representative, as variability is an inherent characteristic of the system.

B. Conclusions

Debt recovery, far from being a mere administrative formality, constitutes a complex and multifaceted legal process that demands strategic and diligent action from the creditor. From the initial diagnosis of the debt and the debtor’s solvency, through the mandatory nature of Alternative Dispute Resolution Mechanisms (MASC) as a requirement for admissibility, to the eventual filing of a judicial claim and the forced execution phase, each stage presents its own particularities and legal challenges.

Therefore, having specialized legal advice from the outset can be the best investment to protect your rights as a creditor, as it allows you to understand the complexity of the process and maximize the possibilities of recovering the debt. It is important to establish a tailored action protocol for each company based on the type of debt.

This article is purely informative and does not substitute professional legal advice. For further information or personalized advice on credit recovery and other legal matters, please do not hesitate to contact info@gimenez-salinas.es.

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