Debt Collection in the Dominican Republic

The debt collection process in the Dominican Republic 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 payment plan is agreed upon). If this stage does not produce 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 20 years. For claims related to the collection of the cost of goods sold at retail to private consumers, the limitation period is 1 year. The limitation period for claims arising from contractual civil liability is 2 years. The consequences of missing the limitation period apply only at the request of the debtor. The limitation period is interrupted if the debtor directly or indirectly acknowledges the debt, for example, a written acknowledgement or an agreement on a payment plan for the debt. After the interruption, the limitation period begins to count anew.

Dominican law provides for the judicial collection of debts in the ordinary court procedure and in the simplified procedure.

The simplified procedure in the Magistrates’ Court is applicable to civil and commercial cases for amounts claimed up to ten minimum wages based on the highest rate in the private sector. The procedure is carried out by filing a claim with the court through an act of the bailiff, who notifies the defendant to appear on a certain date. The plaintiff, at the same time as the summons, notifies the defendant of the documents and other materials in his possession and to which he intends to rely in support of his claim. Between the day of notification and the day of appearance, at least three full days must elapse. This period may be extended depending on the distance or residence abroad (If the person resides outside the Dominican Republic, the period will be as follows, regardless of the distance: Greater and Lesser Antilles, the American continent – thirty days; Europe and other parts of the world – forty-five days).

The defendant must produce the documents and other evidence he considers necessary to defend his interests within five days from the date of the decision ordering their production, but in no case later than the date of the hearing scheduled for the discussion of the evidence. Within three days of the production of the documents, the defendant shall notify the plaintiff of this.

The court shall then schedule a hearing to hear the briefs of the parties, to mediate the parties and to conduct the investigation. When the court has completed its consideration of the case, it shall order the parties to present their conclusions on the merits and, if it considers that the dispute has been sufficiently considered, it shall conclude the judicial debate. The decision shall be announced within thirty days from the date on which the stage of consideration of the case on the merits was completed.

The decision of the magistrate court may be appealed to the court of first instance within fifteen days from the date of the announcement of the sentence in the presence of the parties, subject to a possible extension of the period depending on the distance or residence outside the territory of the Dominican Republic.

The ordinary judicial procedure in the court of first instance is carried out by filing a statement of claim with the court, after which the court notifies the defendant of the filed claim. Within eight days after notification of the filing of the claim, the defendant must notify the plaintiff’s attorney of the appointment of his attorney. After this, the plaintiff, through his appointed attorney, must transfer to the court registry the documents and evidence on which he bases his claim. At the same time, within five days, the plaintiff’s attorney must notify the defendant’s attorney of the transfer of the documents and evidence and request to review them. After the expiration of the specified periods, the defendant must also transfer to the court registry the documents and evidence on which he bases his defense, and also notify the plaintiff’s attorney through his appointed attorney of the transfer of these documents.

After completing the above actions, the more active party must file a motion to schedule a hearing, which must take place within a period of not more than thirty days, to consider procedural issues (if necessary) or to consider the case on the merits. If the defendant’s lawyer has not been appointed, the claim will be satisfied if it is fair and based on legal evidence. In the case of multiple defendants, if one or more of them have appointed a lawyer and the others have not, the process will continue as an adversarial one.

After the completion of the consideration of the case on the merits, the parties make their final arguments, after which the court concludes the hearing on the case and from that moment the countdown of the period for issuing a judgment begins. The decision must be announced within a period of no more than ninety days from the date on which the stage of consideration of the case on the merits was completed.

The decision of the court of first instance may be appealed to the appellate court within one month from the date of the announcement of the verdict in the presence of the parties, taking into account a possible extension of the period depending on the distance or residence outside the territory of the Dominican Republic. The appeal is considered in a court session with the participation of the interested parties. After the completion of the hearing, the appellate court makes a decision that comes into legal force from the moment it is announced. A cassation appeal may be filed against the decision of the appellate court on the basis of a memorandum signed by the lawyer. The memorandum containing the appeal must be filed with the registry of the court that rendered the judgment within thirty days of notification of the judgment. Within fifteen days of filing the memorandum of appeal, the appellant must notify the other party, through the bailiff, of the filing of the memorandum, providing him with an original copy of the memorandum, and file the original notice with the registry within the same period. In case of failure to notify within the prescribed period, the appeal will be considered not filed. After the expiration of the specified period, the registry of the court will send the case to the Supreme Court of the Dominican Republic within five days, together with a certified copy of the judgment contested and other documents constituting the case for consideration. As a result of the consideration of the appeal, the Supreme Court will issue a decision that comes into legal force from the moment of its pronouncement and is not subject to appeal.

After the court decision comes into legal force, the creditor should initiate the enforcement procedure. In the context of the compulsory execution of a court decision, the creditor’s claims may be satisfied by seizing and writing off funds from the debtor’s accounts; seizing the debtor’s movable and immovable property with their subsequent sale; seizing and confiscating securities; seizing and confiscating sea and aircraft; seizing and confiscating unharvested fruit; seizing and confiscating intangible rights.

If the debtor shows signs of insolvency, the creditor should consider the option of bankruptcy of the debtor. According to the provisions of the Commercial Code, any businessman who has failed to pay his commercial obligations is considered bankrupt. At this stage, if the debtor’s assets are insufficient to fully satisfy the creditors’ claims, it is advisable to examine the movement of the debtor’s assets in order to establish the presence of simple or fraudulent bankruptcy of the debtor. An example of simple bankruptcy may be the transfer of large sums for fictitious transactions on the stock exchange or with goods; the purchase of goods for the purpose of their subsequent resale at a lower price; after the emergence of signs of insolvency, the debtor paid off one creditor to the detriment of the others. An example of fraudulent bankruptcy may be the concealment and disguise of movable and immovable property. 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 the Dominican Republic, 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 DOMINICAN REPUBLIC

29.08.2024

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