Debt Collection in Argentina

The debt collection process in Argentina begins with an assessment of the debtor’s solvency, its field of activity, the history of the business, the availability of documentary evidence of the debt, current court cases and enforcement proceedings, and the possibility of disputing the debt. This assessment determines the strategy that will be used on behalf of the client in the collection process.

If the debtor has no current court cases or outstanding judgments for debt collection and is actively engaged in commercial activities, then it is advisable to use the out-of-court debt collection stage.

This stage involves active negotiations with the debtor in order to reach an agreement on the payment of the creditor’s claims or other possible settlement options (e.g. return of goods, transfer of the debt to a third party, exchange of services or goods).

Interaction with the debtor begins immediately after sending a notice by mail, email, phone or instant messengers. This process involves intensive communication with the debtor in order to exert constant pressure. The main objective is to establish contact with key decision makers to achieve the fastest possible debt recovery.

The average time for informal extra-judicial collection is up to 60 days (except in cases where a debt repayment installment plan is agreed upon). If this stage does not bring the expected results or after an initial analysis it becomes clear that it is not applicable, it is necessary to proceed to collection through the courts.

Before initiating judicial collection, it is worth paying attention to the limitation period. The limitation period for debt collection is 5 years. This period cannot be changed by agreement of the parties. The consequences of missing the limitation period apply only at the request of the debtor. The limitation period is interrupted if the debtor acknowledges the debt obligation. After the interruption, the limitation period begins to count anew.

Argentine legislation provides for judicial debt collection in the usual and simplified process.

In a court case, the parties must be represented by lawyers and all procedural documents must be signed by a lawyer, otherwise such documents will not be accepted by the court.

A normal court case is carried out by filing a statement of claim with the court, after which the court checks the claim for compliance with the requirements of the law. If the claim complies with the established form, the judge will send it to the defendant so that he appears and responds within 15 days.

In the response to the claim, the defendant must clearly state the facts on which his defense is based, and also categorically admit or deny each of the facts set out in the claim, the authenticity of the documents attached to it, which are attributed to him. The silence of the defendant, evasive answers or general denial may be regarded as an admission of the truth of the relevant and legal facts to which they relate.

After the debtor provides an answer to the claim or after the expiration of the time limits for doing so, if the essence of the dispute is reduced only to legal issues, the court will complete the consideration of the case and make a decision. If facts that are significant to the case are stated on which the parties have not reached an agreement, the court, even if the parties do not request it, will accept the case for consideration on the merits and schedule a court hearing.

At the court hearing, the court will attempt to reconcile the parties, determine the facts that are decisive for the case, hear the parties’ statements and accept the evidence that it deems admissible. If at the hearing all parties state that they have no evidence to present, or that it consists only of case materials or already attached and uncontested documents, the case is considered closed and the judge will issue a decision.

Otherwise, the court will schedule an additional hearing and give the parties a period of time to present evidence, which may not exceed forty days. At the additional hearing, the court will consider the evidence provided, hear the final statements of the parties and make a decision.

A simplified trial is applicable to simple cases or cases with a small claim value. The process is similar to a regular court process, but within a shorter time frame (all time frames are three days, with the exception of the time frame for responding to a claim, which is five days).

The decision of the court of first instance may be appealed within 5 days from the date of notification of the decision. The appeal is considered in a court session with the participation of the interested parties. After the hearing, the appellate court makes a final decision. The decision of the appellate court may be appealed to the Supreme Court of Argentina within 5 days from the date of notification of the contested decision. As a result of the consideration of the appeal, the Supreme Court makes a decision that comes into legal force from the moment of its announcement and is not subject to appeal.

After the court decision comes into legal force, the creditor should initiate the enforcement procedure. The court decision can be presented for enforcement within 5 years. Within the framework of the enforcement of the court decision, the creditor’s claims can be satisfied by seizing and writing off funds from the debtor’s accounts; seizing the movable and immovable property of the debtor with their subsequent sale; seizing and confiscating securities.

If the debtor is in a state of cessation of payments, regardless of their cause and the nature of the obligations, the creditor has grounds to initiate bankruptcy proceedings against the debtor. The state of cessation of payments must be proven by any fact that indicates that the debtor is unable to regularly fulfill his obligations. At this stage, in the event of insufficient assets of the debtor to fully satisfy the creditors’ claims, it is possible to cancel the debtor’s transactions that caused damage to the debtor or deprived him of assets. Among such transactions, it is necessary to highlight transactions concluded during the period of suspicion, in particular: gratuitous transactions; early payment of debts, the term of performance of which was to occur on the day of bankruptcy or later; granting a mortgage or any other privilege under an obligation that is not subject to execution, which initially did not have such a guarantee. The period of suspicion is the time that has passed from the date determined as the beginning of the cessation of payments until the bankruptcy decision is made. Other actions detrimental to creditors, committed during the period of suspicion, may be recognized as invalid in relation to creditors if the person who entered into the transaction with the debtor knew about the state of cessation of payments. As a result of the cancellation of such transactions, it is possible to return back to the debtor what he lost from such transactions and due to this increase the liquidation estate to satisfy the claims of creditors and cover the costs of implementing the bankruptcy procedure.

If you have any questions or you need support on international debt collection in Argentina, our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us for more information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY ARGENTINA

23.09.2024

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