Debt collection in Romania

The debt collection procedure in Romania begins with an analysis of the debtor’s financial indicators, its field of activity, the history of the enterprise, the availability of documentary evidence of the debt, current court cases and enforcement procedures, as well as the possibility of challenging the debt. This analysis forms the strategy that will be used to repay the debt. 

For a Romanian corporate debtor, this preliminary analysis should normally include checking the company’s status and registered details in the Romanian Trade Register, reviewing insolvency-related publications in the Insolvency Proceedings Bulletin, checking available court data and assessing whether the debtor has identifiable assets or ongoing business activity. These checks help determine whether amicable collection, a payment order, ordinary court proceedings, enforcement measures or insolvency proceedings are more appropriate in the specific case.

If the debtor does not have current court cases or outstanding court decisions on debt collection, and he is actively engaged in his activities, then it is advisable to proceed to the stage of amicable debt collection.

This stage involves active negotiations with the debtor to reach an agreement to pay the creditor’s claims or other possible settlement options (for example, return of goods, transfer of debt to a third party, exchange of services or goods).

Interaction with the debtor begins immediately after sending the notification by mail, email, telephone or instant messengers. This process involves intensive communication with the debtor in order to apply constant pressure. The main task is to establish contact with key decision makers to achieve speedy debt repayment.

The average time for informal out-of-court collection is up to 60 days (except in cases of installment payment of debt). If this stage does not bring the expected results, or after an initial analysis it becomes clear that it is not applicable, you should proceed to recovery through the court.

Before initiating judicial recovery in Romania, the creditor should check the applicable limitation period and determine the exact date when the debt became due. As a general rule, the limitation period is 3 years, unless Romanian law or the nature of the specific claim provides a different period. This assessment is important before choosing between amicable recovery, a payment order, ordinary court proceedings, small claims procedure or enforcement strategy.

A limitation defence in Romania should not be described as something that the court applies automatically in every debt recovery case. Under Romanian civil-law rules, prescription is generally a defence available to the party for whose benefit the limitation period runs, and it must be raised at the proper procedural stage. For this reason, the creditor should assess limitation risks before filing the claim and preserve evidence that may show acknowledgement of the debt, partial payment, payment of interest, correspondence confirming the obligation or other circumstances relevant to interruption of the limitation period.

For international debt collection, the 1974 UN Convention on the Limitation Period in the International Sale of Goods may be relevant only for claims arising from international contracts for the sale of goods and only when its conditions of application are met. Romania is a party to this Convention, and the Convention provides a 4-year limitation period for claims within its scope. It should not be treated as a universal limitation period for all foreign creditors or for all types of commercial debts in Romania.

If the limitation period has expired and the debtor properly relies on prescription, judicial recovery becomes significantly more difficult. In such a situation, the creditor’s position may depend on whether there is reliable evidence of interruption, acknowledgement of debt, partial payment, negotiations, settlement documents or other legally relevant circumstances that prevent the debtor from successfully using the limitation defence.

If the creditor already has a judgment from another EU Member State in a civil or commercial matter, the strategy may differ from filing a new claim in Romania. Under Regulation (EU) No 1215/2012, such judgments are generally recognised in Romania without a special recognition procedure and may be enforced without a declaration of enforceability, subject to the documents and procedural steps required for enforcement against the debtor’s assets in Romania.

Romanian legislation provides for three options for debt collection through the court, by issuing a payment order, by implementing the general claims procedure and the small claims procedure.

If there is a risk that the debtor may dispose of assets before the creditor obtains an enforceable title, Romanian law also allows the use of precautionary measures in appropriate cases. Such measures may include precautionary seizure, judicial seizure or precautionary attachment, depending on the type of asset and the procedural situation. They are not a substitute for the main debt recovery claim, but they may help preserve assets where the creditor can justify the need for protection before enforcement starts.

The payment order procedure is applicable to certain, liquid and due monetary claims arising from a civil contract or another written document accepted by the parties in a manner permitted by law. Before filing the application, the creditor must send the debtor a payment summons through a bailiff or by registered letter with declared content and acknowledgement of receipt, giving the debtor 15 days to pay the amount due. If the debtor does not pay within this period, the creditor may apply to the competent Romanian court for a payment order and must attach documentary evidence of the debt and proof that the summons was communicated. To resolve the petition, the judge decides to call the parties for explanations and clarifications, as well as insist on payment of the amount of the debtor’s debt or on reaching an agreement between the parties on payment methods. The summons must be served at the party 10 days before the date of the hearing. No later than 3 days before the start of the court hearing, the debtor must submit his objections, otherwise the court, taking into account the circumstances of the case, may consider this as recognition of the creditor’s claims.

If the debtor pays the debt, the court closes the case. If the debtor disputes the claim, the court verifies the validity of the objection based on the documents available in the case, explanations and clarifications of the parties. If the debtor’s position is justified, the court, by its decision, rejects the creditor’s claim.

If the court verifies the documents and the parties’ explanations and establishes that the creditor’s claim is justified in whole or in part, it issues a payment order indicating the amount due and the payment period. This period must be not less than 10 days and not more than 30 days from the communication of the order, unless the parties agree on another payment term.

An issued payment order can be canceled at the request of the debtor within 10 days from the date of its receipt. Cancellation is permitted only if the court violates the procedure for issuing a payment order. A request for annulment does not suspend execution. However, the suspension can be approved at the request of the debtor only subject to the provision of collateral, the amount of which will be established by the court.

The general claim procedure is carried out by filing a statement of claim with the competent Romanian court. A pre-litigation notice is often useful in practice because it may support negotiations, confirm the creditor’s position and preserve evidence of communication with the debtor. However, the special 15-day summons through a bailiff or registered letter is a specific requirement for the payment order procedure, where proof of communication must be attached to the application; it should not be presented as a universal precondition for every ordinary court claim. In ordinary proceedings, the timeline depends on the competent court, service of documents, the debtor’s defence, the volume of evidence, possible expert examination, appeals and other procedural incidents. For each court session, a list of cases considered on that day is compiled, which is posted on the court portal and at the doors of the courtroom at least an hour before its start. The list will also indicate the estimated time frames set for disposal of cases. Cases in which the parties are represented by lawyers are considered as a priority.

As a result of examining the documents in the case and conducting judicial debates, the court makes a decision (sentence), which comes into force thirty days from the date of its announcement, provided that it is not appealed. The law provides for the possibility of a party to file an application with the trial court to waive the right to appeal. In this case, the decision comes into force from the date of its adoption.

During the appeal process, the appellate court cannot make a decision that worsens the appellant’s position in comparison with the position he had according to the decision of the trial court, unless the appellant agrees with it.

The decision of the court of appeal is final, but can be appealed to the High Court of Cassation and Justice within thirty days from the date of its announcement. An appeal cannot be filed if the amount of the claim is up to 500 000 Romanian lei. The decision of the court of cassation is final and is not subject to further appeal.

The small claims procedure applies to claims not exceeding 50,000 Romanian lei at the date of filing, excluding interest, court costs and other incidental revenues. The plaintiff retains the right to choose between the ordinary procedure and the small claims procedure when the legal conditions for this simplified route are met. The procedure is carried out by completing the approved claim form and submitting it together with supporting documents to the competent Romanian court. After receiving the claim, the court immediately sends it to the defendant, who must provide his response or file a counterclaim within 30 days. Those received documents from the defendant are immediately sent to the plaintiff. As a rule, the case is considered without summoning the parties, but if the court considers it necessary to summon the participants in the case, or a petition for this is received from one of the parties, then the case will be considered with the participation of the parties and oral arguments. The court makes a decision within 30 days of receiving all necessary information or, as the case may be, after oral argument. The court decision can be appealed on appeal within 30 days from the date of notification of it. The decision of the appellate court is final.

If, after the court decision enters into force, the debtor voluntarily does not comply with the court decision, the creditor should obtain a writ of execution and present it with the appropriate application to the bailiff to open the enforcement procedure. If the writ of execution stipulated or assigned interest, penalties or other amounts due to the creditor without establishing their amount, they are calculated by the bailiff in accordance with the law. A writ of execution may be presented for execution within three years from the date the court decision acquired final status.

The creditor’s demands at the stage of forced collection can be satisfied by seizing the debtor’s accounts and writing off money from them; seizure of the debtor’s property (including property held by third parties) with their subsequent sale; arrest and seizure of securities, foreclosure on unharvested fruits and harvests (no earlier than six months before they ripen) through their seizure and subsequent sale. At the same time, the legislation provides, in addition to the forced sale of the debtor’s seized property, a friendly sale, according to which the debtor independently finds a buyer for the seized property and informs the bailiff of the cost and timing of the potential transaction, which can be taken into account by the bailiff.

If the creditor’s claim against the debtor exceeds 50,000 Romanian lei, is certain, liquid and due for more than 60 days, the creditor may consider whether insolvency proceedings are a suitable alternative to ordinary debt recovery. This route is appropriate when the debtor’s failure to pay indicates insufficient available funds for payment of due debts, not merely as a pressure tool in every commercial dispute.

Within Romanian insolvency proceedings, liability of management or other persons connected with the debtor may be considered only under the special conditions provided by insolvency law. This is not an automatic way to collect an ordinary commercial debt directly from directors or shareholders. It may become relevant where the insolvency of the debtor was caused or aggravated by conduct such as using company assets for personal interests, continuing loss-making activity in personal interest, keeping fictitious accounts, concealing assets, artificially increasing liabilities, using ruinous financing methods or preferring one creditor to the detriment of others shortly before insolvency. This mechanism should therefore be assessed as part of an insolvency strategy, together with evidence of the persons involved, the causal link and the damage caused to creditors.

If you need legal support with debt collection in Romania, Grandliga can help analyze the debtor, evidence of the debt, limitation period, available court procedures, enforcement options and insolvency-related risks. The appropriate strategy should be selected after reviewing the contract, invoices, correspondence, payment history, debtor status and available assets in Romania.

# DEBT COLLECTION AGENCY ROMANIA

12.04.2024

1448