FAQ – Credit Recovery

Frequently asked questions on credit management and debt collection


What is the legal interest rate?

Year by year, the Treasury Department provides by decree to establish the legal rate on a discretionary basis. The most recent MEF decree of December 13, 2021 (in Official Gazette No. 297 of December 15, 2021) established the legal interest rate of 1.25% base per annum, effective January 1, 2022.

What does the payment order consist of?

The payment order is an act through which the creditor notifies the debtor of the definitive expiry of the time limits (10 days) for fulfilling the payment obligation. It precedes enforcement and can be served when the creditor has an enforceable title.

How does the ordinary debt collection process work?

An ordinary procedure for debt recovery requires that the nature and extent of the debt be ascertained in court in order to arrive at a judgment that obliges the debtor to answer for the outstanding amount. In addition to an extrajudicial phase of reminders to pay, the procedure is generally preceded by the default notice to the debtor.

What is an injunction?

An injunction is a measure issued by a competent judge at the request of the creditor. In concrete terms, it obliges the debtor to meet the commitment, i.e. to pay the creditor the amount due or to deliver a given movable asset. Once the time-limit – generally set at 40 days from the service of the document – has expired without the debtor having paid the amount due or having lodged an objection to it, the way will be opened for a rapid action to seize the debtor’s assets. The conditions for applying for an injunction are set out in articles 633 et seq. of the Code of Civil Procedure.

Is it possible to oppose an injunction?

No later than 40 days from the date on which the service of an injunction was perfected, i.e. before the expiry of its terms, the debtor is entitled to oppose it in court by means of a writ of summons, as provided for in article 645 of the Code of Civil Procedure. Ordinary proceedings will then follow.

What safeguards can be included in a contract to make it more likely to be fulfilled?

It is possible to include in a contract one or more ancillary clauses to ensure compliance with the terms of the agreement, as well as to facilitate compensation for non-performance. For example, a deposit can be established, either confirmatory or penitential, or a penalty that calculates in advance the amount of damage to be compensated if what has been agreed between the parties is not respected. The contract can also provide for protection instruments and real or personal guarantees. This is the case with a pledge of movable property and a mortgage of immovable property, granted by the other party. Examples of personal guarantees are the surety and the guarantee on first demand, that is, patrimonial guarantees given by a third party, in the first case jointly with the debtor, in the second through an autonomous agreement.

What is assisted negotiation?

Assisted negotiation is an institution – regulated by Law 162/2014 – which provides for the signing of an agreement between the parties aimed at settling a dispute out of court. The assisted negotiation is considered an obligatory step if you intend to pursue a request for payment for sums less than 50,000 euros and also in cases of compensation for damages arising from the circulation of vehicles and boats. Assisted by a lawyer, the parties attempt to reach an agreement. In the event of failure to reach an agreement, they may proceed to court to protect their interests.

Is it possible to demand interest from the debtor in case of delay in the performance of a contract?

Failure to comply with the terms and deadlines of a contract generates a debt to which interest on arrears can be added, which effectively sanctions the defaulting party. z The ability of the firm to meet its obligations under the contract.
A contract may also provide for an interest rate to replace the legal rate, within the limits of the anti-usury thresholds. It is essential that the application of interest rates alternative to the legal interest rate be in writing, in accordance with article 1284 of the Civil Code.

Is it possible to recover the credit on a promissory note?

Since an overdue bill of exchange is an enforceable title under the law (article no. 63 of Royal Decree 1669/33), it is sufficient to serve a writ of execution on the debtor, ordering him to pay the amount due. Should the insolvency continue beyond the term of 10 days from the service of the deed, the path towards the seizure of the debtor’s assets aimed at the total recovery of the debt would be set in motion.

How do you recover a debt when payment is made by check?

Similarly to what happens with bills of exchange, a bank cheque is also to be considered an enforceable title under the law (article no. 55 of Royal Decree 1736/33).

How long is a case held out of court?

The timing of the out-of-court phase can vary according to the specific case and on the basis of the development of the necessary steps with the occurrence of particular situations, among all we underline the possible unavailability of the debtor.

What happens if the debtor proposes a lower payment or a repayment plan?

Changes to the amount of the debt or installments of the related outstanding payment through a repayment plan may only be authorized by the creditor. Under no circumstances may this be a decision taken independently by the Debt collection companies.

What happens if the debt collection operation does not bring any results?

Each individual debt collection case is initiated only after a careful and thorough analysis of its feasibility. In the event that it is deemed impracticable or the procedure is not considered sufficiently advantageous for the client, all the relevant specific information and observations will be provided. When, on the other hand, it is the out-of-court stage of debt collection that fails to achieve the set objective, a negative report is drawn up and the opportunity to proceed to court is assessed.


What documents and data do you need to prepare an estimate?

When preparing an estimate, you must provide some essential information, including the amount to be recovered and the date of origin of the debt.

What documents need to be produced in order to engage you?

In order to proceed with an initial phase of out-of-court debt recovery, the Agency must have available certain documents proving the collectability of the receivable, among which are contracts, invoices and/or securities that have not been paid.

How soon is a debt collection process initiated?

Given the importance of acting promptly in order to have a better chance of achieving the objective, the Company undertakes to carry out a rapid analysis of the documentation in the creditor’s possession and the relative verification of the feasibility of the operation, which will be followed, within 48 hours, by the first sending of the payment reminder to the debtor.

How often can I receive updates on the status of my file?

From the early stages of studying the feasibility of the debt collection action to the periodic monitoring of collections, the client is constantly updated on the progress of the assigned case.

In the event a reentry plan is initiated what happens?

The debtor is required to make monthly payments of the agreed sum to the creditor’s bank account details. The Debt Collection Company monitors the collections and issues an invoice for the agreed commission on the recovered sums.

What are the costs to be incurred if the debt is collected?

The commissions charged to the client who entrusts the debt collection assignment are calculated as a percentage of the sums that are actually recovered and vary from a minimum of 7% to a maximum of 18% of the total amount collected in relation to cases handled within the national territory. The percentage of the rates applied is established at the time of the assignment and quantified on the basis of the amount of the debt to be collected and its relative seniority.

Should an expense be incurred even if the debt is not recovered?

In the event that the debt collection procedure is unsuccessful, the creditor client will not have to bear any costs, with the exception of the cost of activating the procedure beforehand.

How quickly can a credit be recovered?

It is not possible to establish in advance and with certainty the timeframe necessary to achieve the objective of debt collection, given that this is a procedure which is complex by nature and there are many variables involved. In this regard, consider the checks linked to the counterparty’s financial situation, useful for assessing in detail the chances of success of the operation, any difficulties in tracing the debtor and the possible disputes on the actual collectability of the credit submitted by the debtor.

Are there differences if the debtor is represented by a company or a private individual?

A debt collection procedure can be activated indiscriminately both against a company and a private individual. The Company provides a dedicated and highly specialized team in the different areas of reference.

Can you be entrusted with the collection of a debt even if you have already instructed a lawyer?

The Debt Collection Company may not take action against the debtor if the assignment has already been given to a lawyer. In this specific case, the formal revocation of the mandate or the definitive conclusion of the procedures already started is required.

Do you operate throughout the world?

Credit Group Italia can count on an international network of professionals active in 77 countries and on 98 legal partners able to intervene effectively and with customized strategies for debt collection abroad.

What receivables can be carried at a loss?

For check the requirements for deductibility of losses in case of unpaid credits it is necessary to refer to article 101 of the Consolidated Income Tax Act (TUIR). Losses on low-value credits (element to be calculated by referring to company turnover), on prescription credits or related to bankruptcy declarations, deriving from debtors subject to insolvency proceedings or who have concluded a debt restructuring agreement.

The definition of modest amount is rigorously defined by the legislator and is configured as:

  • € 5,000 for companies with revenues of no less than € 100 million;
  • euro 2,500 for companies of smaller dimensions.

Is it true that debt collection companies must have special licenses?

The start-up of a debt collection company on behalf of a third party requires the issuance of appropriate authorization from the Police Headquarters of the place in which you intend to open the registered office. This is followed by a series of checks that include compliance with the legal requirements contained in Article 115 of the Consolidated Law on Public Security (TULPS). The license entitles the activity without territorial limits.