Debt Collection Portugal
Debt Collection Portugal. International debtors with poor reliability for making payment: they are a thorn in the side for many organizations. There are sufficient ways to have your foreign customers pay, including in Portugal. What are your options for collections in Portugal?
Content on this page:
When a Portuguese debtor does not pay within the set deadline, it is a good idea to send a demand for payment immediately. It is important that you remain in contact with your debtor, in writing or by telephone. If your debtor does not pay after your demand for payment, you can assign your claims to Collections in Europe.
Should your Portuguese customer not pay, you can upload your claim to Collections in Europe. We will then recommend some course of action. This is often serving a summons on the debtor or preparing a case file. It will also take account of the case’s chances of success, litigation risk, and the costs and benefits for you as the creditor.
A. Extrajudicial collections
In the extrajudicial stage, a Collections in Europe lawyer sends the debtor a demand for payment. This demand will include the original amount of the claim, along with interest and costs. When the debtor does not pay, a second, and possibly a third, demand is made. If a third demand for payment is needed, the letter will inform the debtor that legal action is the next step if payment is not received. Where these demands produce no payment, the lawyer will call the debtor to learn more about the financial situation.
B. Court-ordered collections
Once the debtor has not paid after all demands have been made, legal action will be launched in consultation and collaboration with you. When your Portuguese customer does not pay, you have a choice between a court order compelling payment or an action on the merits.
Order compelling payment
Obtaining an order compelling payment is an effective, quick, and relatively inexpensive way to acquire executable title. After filing an order compelling payment, the debtor is ordered to pay within fifteen days. The debtor is also given the opportunity to raise a defense. When the debtor does not raise and defense and does not pay by the set deadline, the court will render judgment.
Action on the merits
An action on the merits makes sense only in complex cases. The costs associated with this form of action are greater and it can take longer than other proceedings.
When the debtor cannot come up with the amount owed a settlement will be agreed. A settlement is considered an executable title in Portugal. This title enables direct attachment to be placed on the debtor’s assets. This avoids the need for an extensive action on the merits.
Petition for bankruptcy
When the debtor is insolvent, Portuguese law allows for a petition for bankruptcy. Creditors are then paid from the proceeds of the sale of the debtor’s assets.
Would you like more information about collections or bringing legal action in Portugal? Fill out the contact form or call us: +44 (0)20 3808 5878.
Click here to upload your claim to us.