The order for payment and the monitorio procedures in Spain

Nowadays, many companies are facing unpleasant situations where clients do not pay for their services. The first thing to do is to try to solve the conflict by sending a formal requirement: the ideal would be the so-called Burofax, a type of service provided by the Spanish post that certifies not only the dispatch but also the content. As in many other jurisdictions, Spanish judges appreciate if you try to solve the dispute out of court.

Upon failure to collect the debt, the creditor has to decide which judicial proceeding is more suitable for his/her particular claim.

The election of the most suitable proceeding depends on the title against the debtor and the amount of the debt. Based on these two elements, we are going to focus on orders for payment procedures and the so-called Monitorio procedures.

Order for Payment Procedures (Procedimiento Cambiario)

Only creditors with enforceable titles, among others, exchanges, cheques or promissory notes, can use this particular order for payment procedure or Procedimiento Cambiario.

Creditors, through the appropriate representation, can file a lawsuit (demanda de juicio cambiario) before the trial court of the defendant’s domicile. They must attach the original enforceable title. Upon submittal, the court has to verify that the lawsuit complies with all pertinent formalities. The court will serve the lawsuit, and the debtor will have a ten-day deadline to pay the debt. If the debtor fails to pay the outstanding amount, the court can order the seizure of the debtor’s assets.

The court must publish its decision within ten days.

When a creditor does not have any enforceable document, he/she can choose between starting an ordinary legal procedure for debt collections or the so-called, Monitorio procedure. Lawmakers have come up with this faster procedure for collecting debts up to 250.000 EUR. Over this amount, creditors can use the ordinary procedure.

The Monitorio Procedure

Until May 2010, creditors could only claim through this Monitorio procedure debts up to 30.050 EUR. Since May 2010, the limit has risen up to 250.000 EUR. This procedure is ideal for a faster collection of liquidated and payable pecuniary debts according to the preamble of the law 13/2009 November, 3rd, reforming the Spanish Civil Procedure Code.

If the court dismisses the action, the creditor can file an appeal before the Supreme Court of the corresponding region. Meanwhile, creditors can provisionally enforce the trial court’s decision.  If the court grants the action but the debtor files an appeal, the preventive seizure of the debtor’s assets will be modified according to the Spanish Civil Procedure Code.

The law provides that the payment shall be due and the creditor must have the appropriate evidence of it. These requirements are essential to initiate the Monitorio procedure. Creditors must file a written plea before the corresponding trial court submitting all pieces of evidence at that time (orders, invoices, confirmations orders, etc.). It is important, that these documents are somehow signed by the debtor and not unilaterally produced by the creditor. The venue is again the debtor’s domicile. The judge will review the filed documentation and, if appropriate, the court will send an order for payment to the debtor.

Before the reform of the Civil Procedure Code, judges were in charge of requesting payment. After the reform, judicial agents are the ones in charge of requesting the payment. Therefore, the current procedure would be faster than it was. The debtor has a 20-day deadline to satisfy the due amount upon receiving the order of the court. The judicial agent will confirm the payment and will be added to the judicial record.

Failure to pay is the end of the procedure. The court will order then the closing of the file. The judgment closing the file is automatically enforceable. This judgment is equivalent to one of the aforementioned titles that are directly enforceable. By sending the statement of enforceability, the creditor receives a claim to surcharge on overdue payment. Creditors can claim the payment of the legal interest increased in two points or the agreed interest payment. These circumstances make this proceeding very popular because the creditor can receive a writ of enforcement pretty fast, however, depending on the load of work of the court in question.

If the debtor objects to pay within twenty days, the court will end the Monitorio procedure and the creditor could file another similar lawsuit within the ordinary procedure before the same court. If the amount exceeds 901 EUR, representation by a judicial agent would be required. The procedure will start all over again. The court must check the formalities of the lawsuit, serve a copy to the opposite party, hold a preliminary hearing where parties propose depositions, and hold a final hearing when cross-examination will take place. After this hearing, the judge will publish his judgment.

If the amount is below 901 EUR, another oral proceeding starts, the so-called Juicio Verbal. The court will make its decision just after hearing the oral arguments of both parties.

To sum up, there are two types of proceedings: direct enforceability of titles and Monitorio procedure, which, after opposition, will turn into an ordinary proceeding or the so-called Juicio Verbal, depending on the claimed amount.

When the creditor does not have any enforceable title, the most highly recommended proceeding is the monitorio procedure. It is cost and time-saving, especially when there is no opposition.

For additional information regarding the order for payment and the monitorio procedure in Spain,