Debt Collection in Bolivia

The debt collection process in Bolivia begins with an assessment of the debtor’s solvency, their line of business, 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 court.

Before initiating judicial collection, it is worth paying attention to the limitation period. The general limitation period is 5 years. The consequences of missing the limitation period apply only at the request of the debtor. The limitation period is interrupted by any action by the debtor that indicates recognition of the debt. After the interruption, the limitation period begins to count anew.

Bolivian legislation provides for judicial debt collection in ordinary and enforcement proceedings.

Ordinary judicial proceedings are 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. The claim may be filed only after the conciliation procedure has been exhausted. After the decision to accept the claim has been made, it shall set a time limit for filing objections and indicate the date for summoning the defendant. After receiving the summons, the defendant must file a response to the claim within thirty days. Upon expiration of the specified time limits, regardless of whether a response has been provided or not, a preliminary hearing shall be scheduled, which shall take place within a period of no more than five days.

In the response to the claim, the defendant shall state his opinion on the facts set out in the claim, as well as on the authenticity of the attached documents, the authorship of which is attributed to him, and their content. Silence or evasion shall be considered as an admission of the facts and the authenticity of the documents. Also, the defendant must state clearly and accurately the facts relied upon in support of his defense and attach evidence relevant to the case and state other evidence he intends to produce, stating what facts he intends to prove.

The defendant, based on his interests, may admit the plaintiff’s claim, raise preliminary objections, take a wait-and-see position, give a negative response, or file a counterclaim. If the defendant chooses more than one of these options, he is obliged to act simultaneously and within the framework of one procedural act. If the defendant admits the claim, the decision will be made without the need to provide additional evidence or conduct additional procedures. If the admission is partial, the claims will be considered proven in the admitted part, and the proceedings will continue on the remaining issues.

If the defendant fails to appear upon expiration of the time limit for filing a response, his evasion of participation in the proceedings will be announced at the initiative of the court or at the request of the other party. The defendant’s evasion will create a simple presumption against him regarding the facts stated by the plaintiff until they are refuted.

The following actions will be performed at the preliminary hearing: confirmation of the claim and the response to it, and clarification of unclear, contradictory or inaccurate points, in the opinion of the judicial body or the parties; an attempt at conciliation by a judicial body on all or some of the issues in dispute; a final determination of the subject matter of the trial; determination of the order and admissibility of evidence; the admission of evidence that can be presented at the hearing or the appointment of an additional hearing for evidence that has not been presented before its conclusion.

If the case is purely a matter of law, or if, despite the fact that it is a factual matter, all evidence has been fully presented, or if it is decided not to take into account evidence that has not yet been presented, the parties will be heard and a judgment will be rendered.

If the preliminary hearing fails to fully consider the evidence, the parties will be summoned to an additional hearing, which will take place within the next fifteen days. During this time, all necessary actions scheduled for execution outside the hearing, such as inspections, examinations, reports and other similar activities, will be carried out so that they are completed by the time of the additional hearing. At the additional hearing, all evidence will be considered, after which the court will hear the arguments of the parties and render a judgment.

The execution process is applicable to the collection of a certain sum of money, confirmed by a written document. After the claim is filed, the judicial authority will examine the written document, as well as the liquidity and delinquency of the obligation, and will render a preliminary judgment, assigning an attachment and ordering the continuation of execution until the amount claimed, interest, legal costs and expenses are collected. The same decision will inform the defendant of the possibility of filing objections. After the defendant has been notified, he will have ten days to file all objections to the claim in one act, present all documentary evidence in his possession and indicate the means of proof that he intends to use. Otherwise, if the defendant does not file objections, the decision will be considered final and the case will proceed directly to the enforcement stage.

If objections have been filed, all of them will be considered in the court session, after which the court will make a final decision. Decisions made in the enforcement process may be changed in the subsequent ordinary process, provided that the case concerns substantive law and in no case the execution process. This process may be initiated by either party after the decision has entered into legal force, within six months. After this period, the right to file a claim for review of the decision made in the execution process is lost.

The decision of the court of first instance may be appealed within 10 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 Bolivia within 10 days from the date of notification of the contested decision in the event of an incorrect interpretation or improper application of the law. 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 may be presented for enforcement within 5 years. As part of the enforcement of the court decision, the creditor’s claims may 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.

An alternative option for debt collection may be the bankruptcy procedure of the debtor. The creditor has the right to initiate the bankruptcy procedure of the debtor in the event that the debtor has ceased to fulfill its obligations. Bolivian legislation provides that the cessation of payments is assumed upon the occurrence of any of the following events, for example: the absence or insufficiency of property that can be seized; failure to pay one or more obligations that are liquid and subject to fulfillment; the absence and concealment of the debtor; closure or suspension of the activity of the enterprise. At this stage, in the event of insufficient assets of the debtor to fully satisfy the claims of creditors, it is possible to cancel the transactions of the debtor that caused damage to the debtor or deprived him of assets. Among such transactions, the following should be highlighted in particular: alienation of property free of charge or for consideration significantly less than the property of the debtor; payment of debts whose maturity date has not yet arrived; transactions for a fee, offered as a fraud with creditors, provided that the third party knew about the poor state of affairs of the debtor. The cancellation of these transactions is allowed if they were made within two years before the date of opening of the bankruptcy case. 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 thereby 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 Bolivia, our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us to get additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY BOLIVIA

18.09.2024

426