Debt collection in Spain

The debt collection procedure in Spain begins with a legal and financial assessment of the debtor: solvency, business activity, company history, documentary evidence of the debt, pending court cases, enforcement procedures, possible objections and attachable assets. In Spain, the strategy should also assess whether a good-faith pre-court dispute resolution attempt is required before filing a claim, whether the debt is suitable for a payment order procedure, whether the case should proceed through ordinary civil proceedings or simplified civil proceedings, and whether a Spanish or foreign court decision will need to be enforced in Spain.

If the debtor has no pending court cases, no outstanding court decisions and no clear signs of insolvency, and continues to carry out business activity, it is usually reasonable to start with out-of-court debt recovery. At this stage, the creditor may propose voluntary payment, a payment schedule, return of goods, assumption of the debt by a third party, set-off, alternative performance or another lawful solution that may close the dispute without court proceedings.

Out-of-court communication with the debtor should be provable. It may include postal delivery with proof of receipt, electronic correspondence previously used by the parties in their business relationship, notarial notice, mediation, conciliation or another appropriate dispute resolution method. The main objective is not to apply pressure, but to record the subject of the debt, the amount claimed, the documents supporting the claim, the payment proposal and the creditor’s good-faith conduct before going to court.

Since 2025, in civil and commercial disputes where the law requires it, a prior good-faith dispute resolution attempt may be a condition for the court to admit the claim. This attempt should relate to the same subject matter as the future dispute, and the creditor should keep evidence that the proposal was sent to the debtor and that the debtor had the possibility to know its content.

The duration of this stage depends on the debtor’s response. For procedural purposes, the negotiation attempt may be considered closed without agreement, among other cases, if thirty calendar days pass from receipt of the initial negotiation request without a first meeting, contact or written response; if a specific settlement proposal receives no response within thirty days from receipt; or if three months pass from the first meeting without agreement. If negotiations do not resolve the dispute, judicial recovery should be prepared with documents proving both the debt and the pre-court resolution attempt.

Before initiating court action, the limitation period should be checked. As a general rule, personal claims that do not have a special limitation period expire five years from the moment when performance of the obligation can be demanded. The limitation period may be interrupted by filing a claim before the court, by an out-of-court demand from the creditor, or by any act of the debtor acknowledging the debt.

In addition, a request to start a dispute resolution activity may affect the running of the limitation period or other applicable time limit, provided that the creditor can prove an attempt to communicate the request to the other party. For monetary debts, a formal demand also helps establish the debtor’s default. When the creditor demands performance of a payment obligation in court or out of court and the debtor is in default, compensation usually consists of the agreed interest and, in the absence of an agreement, statutory interest.

Spanish procedural law allows debt recovery through several routes: ordinary civil proceedings, simplified civil proceedings and the payment order procedure. The choice depends mainly on the amount of the claim, the subject matter, the debtor’s expected objections and the quality of the documents proving the debt. In civil declaratory proceedings, the claim must be preceded by an appropriate dispute resolution method when the law requires it as a condition for admission.

Ordinary civil proceedings begin with a claim filed before the competent court, together with the documents and evidence supporting the creditor’s claim. As a general rule based on the amount, this route is used when the claim exceeds EUR 15,000 or when the economic interest cannot be calculated, unless the law assigns the matter to another type of procedure. After the claim is admitted, the debtor is given the opportunity to respond within the applicable procedural time limit.

In this route, the preparatory stage is used to define the disputed facts, resolve procedural issues, check whether settlement is possible and decide on the admission of evidence. If the dispute continues, the court examines the evidence, hears the parties’ positions and issues a decision. For a foreign creditor, it is especially important to prepare from the outset documents that can be translated, proof of the origin of the debt, calculation of the amount claimed, interest, prior communication with the debtor and information that may support future enforcement.

Simplified civil proceedings are used, among other cases, for claims whose amount does not exceed EUR 15,000 and which do not have to follow ordinary civil proceedings because of their subject matter. This route is more concentrated than ordinary proceedings, but it should not be treated as automatic or informal: the claim and the defence should clearly define the facts, documents, objections and evidence.

In simplified civil proceedings, the debtor should state in the defence whether a court hearing is considered necessary. The creditor should also state its position on this point after receiving the debtor’s defence. If neither party requests a hearing and the court does not consider it necessary, a decision may be issued without further steps; if a party requests a hearing or the court considers it appropriate, a hearing date is set.

When a hearing is held, the court may clarify the dispute, resolve procedural issues, order the taking of admitted evidence and, after the evidence, allow the parties to present oral conclusions. In simplified proceedings determined only by value and not exceeding EUR 2,000, and in the initial application for a payment order, the participation of a lawyer and procedural representative is not mandatory within the limits set by Spanish civil procedural law. In commercial and international debt disputes, professional assistance usually remains important for preparing evidence, determining the competent court and planning future enforcement.

The decision of the court of first instance can be appealed to the court of appeal within 20 days from the date of notification of the contested decision. Appeals against judgments rendered in oral proceedings with a claim amount of up to 3,000 euros are not permitted. The case is considered through an oral hearing. The court will make a decision on the appeal within ten days after the end of the hearing. If a hearing is not held, a decision is made within one month from the expiration of the time limit for the defendant to object to the appeal.

The decision of the appellate court may be appealed in cassation within 20 days from the date of notification of the contested decision. A cassation appeal must be based on a violation of a procedural or substantive norm if there is a cassation interest. A complaint will be considered to have cassation interest if the appealed decision contradicts the legal doctrine of the Supreme Court of Spain or resolves issues on which there is conflicting practice of provincial courts. The complaint is considered through a hearing procedure. As a result of considering the appeal, the court makes a decision that comes into force from the moment it is announced and is not subject to further appeal.

The payment order procedure applies to monetary debts that are liquid, determined, due and enforceable, provided that the debt can be proven by written documents, invoices, delivery notes, certificates, commercial communications, acknowledgment of debt or other documents showing the relationship between creditor and debtor. The procedure begins with an application filed before the competent court and is especially useful when the creditor has clear documents and the debtor has no strong legal basis for objection.

If the court admits the initial application, the debtor is required to pay or file an objection within twenty days. If the debtor pays, the procedure ends; if the debtor neither pays nor objects, the creditor may request the start of enforcement. This route is effective when the claim is well documented, but it loses speed if the debtor files a reasoned objection.

If the debtor objects, the payment order procedure ends and the claim continues through the applicable civil proceedings. If the amount falls within the scope of simplified civil proceedings, the case continues under that route; if it exceeds that limit, the creditor must file the corresponding civil claim within the time limit provided by procedural law.

Once the court decision becomes final or has enforceable effect, the creditor may initiate enforcement proceedings to obtain compulsory payment of the debt, interest and awarded costs. Enforcement should not be treated as a purely formal stage: its effectiveness depends on locating the debtor’s bank accounts, assets, receivables from third parties, real estate, company interests, income and other attachable property rights.

In enforcement proceedings, the creditor’s claim may be satisfied by attachment of bank balances, receivables from third parties, movable and immovable property, securities, company interests, income and other property rights of the debtor. If attached assets must be converted into money, the sale may be carried out through an electronic auction or other mechanisms provided by Spanish civil procedural law.

If the creditor already has a foreign court decision, the route depends on the state of origin. Court decisions issued in another European Union Member State in civil and commercial matters are recognised in Spain without any special procedure and, if enforceable in the state of origin, may be enforced in Spain without a prior separate declaration of enforceability. Court decisions issued in states outside the European Union are subject to the Spanish judicial recognition procedure under the law on international legal cooperation in civil matters; recognition may be refused, among other grounds, if the decision is contrary to public policy, manifestly violates the right of defence, concerns matters within the exclusive jurisdiction of Spanish courts, or is incompatible with an existing decision.

For uncontested cross-border monetary claims within the European Union, it may also be useful to assess the European Payment Order. Spanish law provides that it is not necessary to use an appropriate dispute resolution method beforehand when filing an application for a European Payment Order or when starting the European small claims procedure. This option may be relevant when the creditor and the debtor are located in different Member States and the monetary debt is not disputed.

If the debtor shows signs of insolvency, the creditor should assess insolvency proceedings and, where applicable, the existence of negotiations for a restructuring plan. A declaration of insolvency is linked to the debtor’s inability to regularly meet obligations; in addition, negotiations with creditors may be opened where there is a probability of insolvency, imminent insolvency or current insolvency. This is important because an individual recovery strategy may be affected by the opening of insolvency proceedings, by the suspension or limitation of enforcement measures and by the insolvency treatment of the creditor’s claim.

In insolvency proceedings, certain transactions carried out by the debtor before the insolvency filing or before notification of negotiations with creditors may be challenged if they are harmful to the insolvency estate. Spanish insolvency law allows harmful acts carried out within the two years before the insolvency filing to be challenged and, in certain cases, also acts carried out within the two years before notification of negotiations aimed at reaching a restructuring plan, even where fraudulent intent is not proven.

Transactions requiring particular attention include gratuitous transfers of assets, early payment of obligations not yet due, granting security for pre-existing debts, transactions with specially related persons, and sales of assets on terms that unjustifiably reduce the property available to creditors. The purpose of these actions is not to cancel any transaction of the debtor, but to restore to the insolvency estate the assets or value that left the debtor’s estate to the detriment of creditors.

For the creditor, this block is important when a Spanish debtor stops paying, transfers assets before the claim is made, concentrates payments in favour of related creditors or starts restructuring negotiations. In such situations, it is advisable to act quickly: document the debt, review suspicious transactions, file the claim in the insolvency proceedings where necessary and assess whether actions exist that may increase the estate available for payment to creditors.

If you need support with debt collection in Spain, Grandliga can analyse the documents, the debtor’s solvency, the limitation period, the need for a prior dispute resolution attempt, the appropriate court route, enforcement of a Spanish or foreign court decision, and risks related to insolvency or restructuring. The strategy should be chosen according to the type of debt, the debtor’s location, the location of assets, the quality of evidence, the existence of objections and the real possibility of enforcement.

# DEBT COLLECTION AGENCY SPAIN

26.07.2024

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