Debt сollection in Cuba

The debt collection process in Cuba 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 courts.

Before initiating judicial collection, it is worth paying attention to the limitation period. The limitation period is 5 years. The law prohibits changing this period by agreement of the parties. The limitation period is interrupted by any act of the debtor recognizing the existence of a legal relationship. After the interruption, the limitation period begins to count anew.

Cuban legislation provides for judicial debt collection in the ordinary judicial procedure and in the simplified procedure.

The ordinary judicial procedure is carried out by filing a statement of claim with the court, after which the court decides to accept the claim, notifies the defendant and prepares for the consideration of the case on the merits. The ordinary judicial procedure is applicable to cases in which the amount of the claim or the value of the property in dispute exceeds 10,000 Cuban pesos or is invaluable or undeterminable.

The statement of claim must be accompanied by documents that prove the debt. If the plaintiff does not have the necessary evidence, the plaintiff must indicate the location of such evidence so that the court can subsequently request it.

After accepting the claim, the court hands it to the defendant and asks him to appear and respond to the claim within twenty days. If the defendant is outside Cuba, the period for appearing and responding is up to 3 months. If the period for appearing has expired and the defendant has not appeared, the claim is considered accepted against him, and the process continues in his absence. However, the defendant may appear at any time to exercise his rights without reopening the process, except in cases provided by law.

If the defendant has filed a response to the claim, the plaintiff is given five days to file a reply to the defendant’s reply, and if a reply is filed, the defendant is given the same period to file a response to the reply. In the said procedural documents, each party must admit or unequivocally deny the facts presented by the other party that are detrimental to him. Silence or evasive answers may be interpreted in the court’s decision as an admission of the facts to which they relate.

If the dispute boils down to questions of law only or to facts the substantiation of which follows from the documents and evidence presented, the court will render a decision without further proceedings. If additional evidence is required to establish the facts, the court will open the process for the presentation of evidence. The usual period for the presentation of evidence is thirty days.

After the presentation of evidence is completed, the court sets a hearing at which the parties will make their final arguments. After the closing arguments are complete, the judge concludes the hearing and makes a decision within 8 days.

The simplified judicial procedure is applicable to cases in which the amount claimed does not exceed 10,000 Cuban pesos and is implemented by filing a claim, after which the court decides to accept the claim. If the claim is accepted, the court serves it on the defendant and invites him to appear and respond to the claim within ten days. If the defendant is outside Cuba, the period for appearing and responding is 15 days.

If the defendant, promptly and duly notified, fails to respond to the claim without good cause, the plaintiff may ask the court to recognize the defendant’s agreement with the facts set out in the claim. In this case, without the need to conduct evidence, the court will issue a default judgment corresponding to the circumstances of the case. However, the court may, in the interests of justice, order the production of evidence that it deems necessary to eliminate reasonable doubts on factual issues.

A period not exceeding twenty days is granted for the production of evidence. After the evidence has been submitted and examined, the court will issue a decision within three 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. Each party must be represented by a lawyer. After the hearing, the appellate court makes a decision within 10 days. The decision of the appellate court may be appealed to the Supreme Court of Cuba within 5 days from the date of notification of the contested decision. The appeal is considered without summoning the parties, unless the relevant party has requested that the case be considered in a session. 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 obtain an enforcement order and initiate the enforcement procedure. The final court decision may be presented for execution within 5 years from the date of entry into legal force. 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; seizure of movable and immovable property of the debtor with their subsequent sale; seizure and confiscation of securities, dividends and corporate shares of companies.

If the debtor has signs of insolvency, the creditor should consider the option of bankruptcy of the debtor. The debtor is considered insolvent if the amount of his liabilities exceeds the amount of his assets. At this stage, if the debtor’s assets are insufficient to fully satisfy the creditors’ claims, it is advisable to investigate the movement of the debtor’s assets in order to establish the presence of guilty or fraudulent bankruptcy of the debtor. An example of guilty bankruptcy may be the sale of goods at a loss or at a price below the market price. An example of fraudulent bankruptcy may be the use of the debtor’s assets for personal purposes, concealment of assets in financial statements, intentional gratuitous donation of assets in favor of related parties. If the involvement of persons who control the debtor in the specified actions is established, then criminal cases may be opened against them and they may be held liable for the company’s debts. By holding controlling persons liable for the company’s debts, creditors can increase their chances of collecting the debt in full.

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

# DEBT COLLECTION AGENCY CUBA

26.08.2024

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