Debt Recovery Methods – 1. Payment Demand
Debt recovery strategies need to be tailored based on specific criteria, such as the debtor’s profile, the debt amount, the debtor’s attitude, solvency, the nature of the debt, and so on. Therefore, both judicial methods (through the courts) and extrajudicial methods must be considered, taking into account the various benefits of each.
Payment demand is a procedure carried out at the request of the creditor with the aim of obtaining the voluntary payment or voluntary execution of certain debts that are certain, liquid, and due, representing obligations to pay a sum of money.
The payment demand includes all the necessary information to identify the parties, the subject and cause of the payment request, the identification and specification of the sums involved, as well as the attachment of evidence supporting the payment request.
The benefits of this extrajudicial procedure are the reduced costs of preparation and transmission, as well as the very short time in which the debt can be recovered. This avoids the situation where a sum of money acknowledged by the debtor ends up being collected over several months due to cumbersome court procedures, incurring significant costs when an honest debtor could have made the payment within 10 business days, as per the payment demand.
In many cases, the debtor acknowledges the debt and agrees to voluntary execution to avoid additional expenses if legal actions are pursued.
Additional expenses may include stamp duty, legal fees, and, if applicable, execution costs. In the event of a favorable outcome in court, all these expenses are recovered from the debtor along with the principal debt.
If the debtor does not acknowledge the debt and does not voluntarily fulfill the obligation, the payment demand serves as a preliminary procedure before filing an order for payment.
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Vladimir Catargiu – Attorney at Law