Debt Recovery and Credit Management

Debt recovery is the process of recovering payments of sums of money owed by one individual (or company) to another, which debts are due and have remained unpaid, together with interest if applicable. The first phase is usually extrajudicial (out of court). A debtor is first notified by means of a legal letter from the creditor’s lawyer, requesting payment of the debt within a specified time, failing which, judicial action may be resorted to. Should the debtor fail to settle the debt amicably, the creditor will be left with no option but to commence the judicial phase for the recovery of such debt. The judicial phase usually commences with a judicial letter sent by the creditor to the debtor (via the Courts of Justice) requesting payment. 

Precautionary warrants may be issued in order to ensure that the certain debtor assets are frozen prior to the creditor proceeding judicially against the debtor, with the ultimate objective of obtaining an ‘executive title’ against the latter. (eg. successful judicial letter under 166A, or a final judgment). Once the creditor is in possession of an executive title, he may then enforce the claim against the debtor by any of the means provided by law.

Credit management is the strategic planning and policy-making in connection with how a business grants credit, to ensure that debtors pay on time, to secure the debts by means of guarantees, to maintain credit costs as low as possible and to mitigate losses as much as possible. A company’s credit management is one of the essential elements of a successful commercial activity. It is therefore crucial for creditors to obtain the right advice at the right time in order to protect debts due to them.

Our team of experienced professionals at Lexvirtualis™ believes that we are best serving our clients by implementing proactive strategies that ensure avoiding any time consuming and expensive litigation processes. We endeavour to establish a close working relationship with all of our clients; we take time to get to know how they manage their business and in turn, provide relevant advice. Should litigation could not be avoided, our experienced litigation team, can guide you throughout the entire debt recovery process.

Examples of our services include:

• Informal notification of a debt

• Out-of-Court (extrajudicial) settlements.

• European Order for Payment proceedings

• Submitting a judicial statement of claim (eg. judicial letter, the judicial letter under 166A, application to small claims tribunal or competent court)

• The entire trial for recovery of the debt

• Precautionary warrants

• Responding to / defending a claim (eg. replies and pleas)

• Ranking of creditors, privileges, etc…

• Enforcing a judgement (eg. executive warrants, judicial hypothecs, judicial sale by auction)