The debt recovery procedure if the debtor is abroad

With globalization, international exchanges are on the agenda. The possibility of interacting in real time between different countries and continents ensures many advantages, but also accompanied by some problems, including, for example, the critical issues regarding credit recovery.

The credit recovery to foreign , in fact, can sometimes be a complex and difficult operation. The obstacles that, in some cases, must be overcome when the debtor – be it a natural or legal person – resides abroad, can be many: they range from the difficulty in proving the credit (perhaps supported by a contract not signed with the due clarity) to the impossibility of recovering sufficient up-to-date financial and commercial information regarding the debtor, up to the problem of finding a competent judge and initiating the legal procedure necessary to sue the debtor. For the reasons mentioned above, it is essential to rely on professionals specialized in international debt collection who have a widely distributed network of partners able to protect the rights of their customers.

Debt collection abroad: the legislation for the EU

As regards debt collection within the European Union, Italy has recently taken an important step forward, adapting to the EU Regulation n ° 655/2014 , promulgated with the intent to facilitate credit recovery abroad, both civil and commercial. According to the legislation, it is possible to implement the precautionary seizure on the bank current accounts of the debtor , always remaining in the European context. This means that preventive seizure is only possible if the judicial authority responsible for managing the order is located in one of the Member States and that the current accounts covered by the order are always in a Member State (obviously different from the one from which legal action has begun).

The procedure for debt collection abroad

According to EU legislation, the debt collection operation abroad can be activated when the judge issues an order of obligation of payment , which is immediately recognized as enforceable in all EU countries, without the need for further procedures. Ordinance in hand, the first step to take is to identify the data of the debtor’s foreign current account. By virtue of Article 14 of the Regulation, following the assessment of the debt, the creditor can come into possession of information such as the debtor’s bank details and the name and address of the bank where the account was opened.

What guarantees for the debtor?

If it is true that the law is the same for everyone and that the presumption of innocence is in force until the sentence has taken place, then it is also necessary to protect the debtor – or presumed as such – for the procedure debt collection abroad. First of all, the creditor must bring to the relevant judicial authority irrefutable evidence of the need to freeze the debtor’s current account. In some cases in fact, the credits are not yet due; furthermore, it must be demonstrated that the amount due is subsequent to an event that has already occurred and of which it is possible to establish the economic value , category which also include, for example, claims for damages or civil offenses. For its part, the debtor has various safeguards available, such as the possibility of opposing or challenging the order of preventive seizure.

Foreign credit recovery in Italy: useful tips

In many cases, credit recovery abroad originates from sales contracts made in favor of a foreign buyer. The main problem, in these situations, is that often the agreements between the two parties are made either through e-mail exchanges or through sales data, such as invoices, but is rarely drawn up a written contract where mutual obligations are put on paper.

Many subjects – especially legal ones – make use of the agreements signed in the acceptance document of the general conditions of sale as regards the debt recovery procedure , which however is sometimes a double-edged sword, particularly when dealing with foreign buyers. In these cases, in fact, the general conditions of sale are a simple translation into English of those used in Italy, with the consequence that, if in some situations, the application of Italian law can be effective, in others it can prove to be absolutely counterproductive. Therefore, if for a business transaction reference is made to the general conditions of sale, it is important to decline them according to the characteristics of the market to which one is addressed , paying attention that they cannot be found trick , on the part of the buyer, to avoid certain obligations to which he is bound and which may give rise to a debt recovery procedure.