MONEY CLAIMS IN SPAIN : MONITORIO PROCESS:
In this post we explain you either to how to claim a debt or credit in Spain or contesting to a claim against you.
Monitorio procedure in Spain is regulated in title III, chapter I, Articles 812 to 818 of the Civil Procedure Spanish Law (LEC).
This type of procedure was created in order to strengthen the protection of credits. It offers effective and quick protection to recover money debts and it is currently one of the most widely used civil procedures.
CARACTERISTICS OF THE RECOVERABLE DEBT
The debt must meet the following criterias:
- it must be in monetary form
- it must be a precise amount
- it must be a liquid asset
- the deadline for payment must have expired
- it must be recoverable in any proportion
Until May 2010, creditors could only claim through this Monitorio procedure debts up to € 30,050.00. Since May 2010, the limit raised up to € 250,000.00.
But the key of this process is that with the application, it should be provided enough evidences and documentation in order to proof that there is a debt.
The Monitorio process has quite a lot advantages:
- Quick system
- No limit to value of claim
- Low costs
- Easy of enforcement
WHAT DOCUMENTATION IS REQUIRED?
As previously mentioned,it is necessary to provide enough evidences and documentation in order to proof that there is a money debt.
For that reason:
- We need to prove the relation between parties with documentation (i.e.: contract)
- We need to prove the amount of debt with documentation such us invoices, certifications, bills, confirmations orders, etc.
- It would be good to prove the origin of the debt and the reasons for the claim submitted.
- It is important that these documents are somehow signed by the debtor and not unilaterally produced by the creditor.
- If a Burofax has been submitted prior Monitorio´s claim, it is convenient to submit it with the claim.
WHERE CAN I SUBMIT THE CLAIM?
The Civil Procedure Spanish Law (LEC) says that the claim can be submitted at the Court where is the:
- Residence of the debtor
- Place of business of the debtor
- If the domicile or residence is not known, it can be used the address where the initial payment should be done.
- In the case of a claim of expenses of community owners, the claim can be presented where the property is located.
HOW THE PROCESS STARTS?
Although it is not mandatory, we recommend you totry to solve the conflict by sending a formal requirement which is known as Burofax. A Burofax is a legal letter where you inform about the debt, the obligation of the debtor to pay it, and giving the debtor a deadline to pay.
The Burofax has to be submitted at the Spanish post and it certifies not only the dispatch, but also the content. Moreover, the Burofax is also a legal proof at Court. It is the best way to prove that you try to solve the dispute out of Court and prove your good will.
Once the debtor has not voluntary paid after the deadline, creditor can start Monitorio Procedure at Court:
As we have mentioned before, the law provides that the payment shall be due and creditor must have the appropriate evidence of it. These requirements are essential in order to initiate the Monitorio procedure. Creditor must file a written plea before the corresponding trial court submitting all evidences at that time (documentation previously mentioned).
The Judicial Agent of the Court will review the claim and the filed documentation and, if appropriate, the court will send an order for payment to the debtor.
Once the order of payment is served, the following scenarios are possible:
1. The defendant voluntary pays.
Debtor has 20 days’ deadline to satisfy the due amount upon receiving the order of the Court. The Judicial Agent of the Court will confirm the payment and will be added to the judicial record. Failure of payment is the end of the procedure. The court will order then the closing of the file.
2. The defendant contests the claim.
If debtor objects to pay within 20 days, the Court will end the Monitorio procedure. The defendant must reply in writing outlining why they oppose the claim and providing relevant documentary evidence. The defendant can dispute all or part of the claim.
In this circumstance, the creditor could file another similar lawsuit within the ordinary procedure before the same Court. There are two different scenarios:
For disputes up to the value of € 6,000.00.
The Judge will arrange a Hearing where parts will dispute the debt.
After the Hearing, the Judge will give his judgement.
If the amount exceeds € 6,000.00.
The debtor will have 1 month to submit a Lawsuit (“demanda de juicio ordinario”).
The process will follow as the Ordinary Trial.
3. The defendant does not respond.
If the defendant does not reply the claim, the claim will be accepted and will pass to the Execution process.
HOW IS THE EXECUTION PROCESS?
The judgment closing the file at Monitorio process is automatically enforceable. This judgment is equivalent to one of the aforementioned titles that are directly enforceable as per Article 517 Civil Procedure Spanish Law (LEC).
Once the order is issued, the amount will accrue interest as per Article 576 LEC, which consist on the legal interest of the money increased in two points, the agreed interest payment or special provision of the law.
The debtor´s assets can be seized in order to pay the debt. A separate enforcement body is not required.
All these circumstances make Monitorio proceeding very popular, because the creditor can receive a writ of enforcement pretty fast, although it will depend on the load of work of the specific Court where the case is studied.
REUTERS SOLICITORS can help you with Monitorio procedure.
If you need advice in relation to either claiming money in Spain or contesting to a claim against you, do not hesitate to contact us for more information.