Debt Recovery Lawyers in Spain

The monitorio procedure is a highly effective debt recovery route for all kinds of creditors, whether businesses, self-employed professionals, individuals or owners' associations, and it is used to demand payment of debts that are liquid, ascertained, due and enforceable.

Once the application has been filed with the court, the debtor will receive a demand for payment.

One advantage of this route is that if the debtor does not file a written opposition with the court, enforcement can be pursued directly (attachment of bank accounts, and so on).

If the debtor files a written response, the procedure is converted into verbal or ordinary proceedings (see below), depending on the amount.

• Here is the link to the site where a monitorio can be filed online without a lawyer or procurador.
• Here is the link to start the monitorio procedure in Catalonia

The procedure is simple and quick. To start it, a monitorio application or claim must be filed together with the document evidencing the debt, which may be:

• a signed document, whatever its form, type or physical medium, bearing the debtor's signature, seal, imprint, mark or any other sign, physical or electronic;
• invoices, delivery notes, certificates, faxes or any other documents which, even if created unilaterally by the creditor, are among those that customarily evidence the credits and debts in relationships of the kind existing between creditor and debtor;
• commercial documents evidencing a prior, ongoing relationship;
• certificates of non-payment of sums owed as common charges of owners' associations of urban properties.

We are here to assist you and to spare you errors and delays, but it should be noted that a lawyer's involvement is not mandatory (article 31 LEC) nor is a procurador's (article 23 LEC) for the initial application, although it is advisable so that no subsequent deadline is missed.

The claim or application must be filed with the Court of First Instance of the debtor or of the place where the debtor can be found, except in cases of non-payment of sums owed as common charges of owners' associations, where the association may choose between the court of the debtor's domicile and that of the place where the property belonging to the association is located.

There is no limit on the amount, so the court may be approached to claim any sum.

As regards costs, the general rules apply: if the creditor obtains a fully favourable judgment, the lawyer's fees and the procurador's charges arising from their involvement will be included, even where such involvement was not mandatory.

Once the claim has been admitted, the debtor will be required to make payment within 20 working days:

• If the debtor pays, the proceedings are closed.
• If the debtor does not pay and does not appear before the court, the monitorio proceedings are declared concluded and the creditor may begin enforcement through attachment of the debtor's assets.
• If the debtor appears and opposes the claim, setting out the reasons why the debt is not owed, the monitorio proceedings come to an end and we move to declaratory proceedings:
  • Verbal proceedings, or 
  • Ordinary proceedings 

• The case will be closed, or a hearing held if requested in the written opposition and in the challenge to that opposition (art. 818 LEC).
• The matter will proceed as  verbal proceedings if the debt does not exceed €15,000. In other words, the creditor must bring a claim for such proceedings. In those verbal proceedings neither a lawyer nor a procurador is required if the claim does not exceed €2,000.
• There are no costs if the claim is not brought.

• Where there is opposition in proceedings for an amount exceeding €15,000, the matter will proceed as ordinary proceedings and the creditor who began the monitorio must bring a fresh claim within 1 month of service of the debtor's written opposition. Only in this case will costs arise if the claim is not brought.
• (It should be noted that a claim for the unpaid debt may be brought without first applying for the monitorio procedure).

In that case, the bill of exchange procedure will be used. 

These are the proceedings in which cheques, promissory notes or other negotiable instruments are claimed on.

The bill of exchange, cheque or promissory note must be filed together with the claim before the Court of First Instance of the debtor's domicile.

The court will require the debtor to pay within 10 working days and will order the immediate precautionary attachment of the debtor's assets, in addition to late payment interest, expenses and costs, in case the demand for payment is not met.

If payment is made, the costs will still be borne by the debtor.

If there is no opposition, the court will order enforcement for the sums claimed.

Where the debtor appears within five days of being required to pay and categorically denies the authenticity of their signature or alleges a complete lack of authority to represent, the court may, in view of the circumstances of the case and the documents produced, lift any attachments that have been ordered, requiring, if it considers it appropriate, suitable security or a guarantee.

That said, the attachment will not be lifted in the following cases:

• Where the issue, acceptance, guarantee or endorsement has been authenticated, with the date stated, by a registered commercial broker, or where the respective signatures are certified on the instrument itself by a notary.
• Where the instrument debtor, in the protest or in the notarial demand for payment, has not categorically denied the authenticity of their signature on the instrument or has not alleged a complete lack of authority to represent.
• Where the party liable on the instrument has acknowledged their signature before a court or in a public deed.

That notwithstanding, within ten days of the demand for payment the debtor may file opposition by way of a claim, in which case it is served on the creditor for challenge within 10 days, and a hearing may be held if the parties so request, following the course of verbal proceedings.

The opposition is filed in the form of a claim. Within ten days, the court will give judgment ruling on the opposition. If the opposition is dismissed and the judgment is appealed, it will be provisionally enforceable in accordance with the provisions of this Act.

Monetary enforcement takes place when an enforcement application is filed seeking enforcement of a money debt recorded in an enforceable instrument, whether judicial or not. The most common case is enforcement of judgments, but there are other instruments that can be enforced without a court decision.

Enforcement will be ordered for the amount claimed in the enforcement application by way of principal and accrued ordinary and default interest, increased by the amount provided for to cover the interest that may accrue during enforcement and the costs thereof. 

The amount provided for these two items, which is set provisionally, may not exceed 30 per cent of the amount claimed in the enforcement application, without prejudice to the subsequent assessment.

The enforcement order will not contain a demand for payment on the debtor where the enforceable instrument consists of decisions of the Letrado de la Administración de Justicia, judicial or arbitral decisions, or decisions approving settlements or agreements reached within the proceedings, or mediation agreements, requiring the delivery of specific sums of money; in such cases the debtor's assets may be attached directly.

If, on the other hand, enforcement for the delivery of specific sums of money is not based on procedural or arbitral decisions, the enforcement order will contain a demand for payment on the debtor for the amount claimed by way of principal and interest accrued, where applicable, up to the date of the claim; and if payment is not made there and then, the court will attach the debtor's assets to the extent sufficient to cover the amount for which enforcement has been ordered and the costs thereof. All of the foregoing applies unless the enforcement application was accompanied by a notarial record establishing that the debtor was required to pay at least ten days in advance.
If the debtor pays at the time of the demand or before the enforcement order, the Letrado de la Administración de Justicia will place the corresponding sum at the creditor's disposal and will provide the debtor with proof of the payment made, with costs borne by the debtor unless the debtor shows that, for reasons beyond their control, payment could not be made before the creditor brought the enforcement.

Once interest and costs have been settled, where they have accrued, the Letrado de la Administración de Justicia will issue a decree bringing the enforcement to an end.

If payment is not made, once enforcement has been ordered, the assets will be attached.

Unless the creditor identifies assets whose attachment it considers sufficient for the purposes of enforcement, the Letrado de la Administración de Justicia will require the debtor to disclose assets and rights sufficient to cover the amount of the enforcement, stating, where applicable, any charges and encumbrances and, in the case of real estate, whether it is occupied, by which persons and on what basis.

At the request of a creditor unable to identify assets of the debtor sufficient for the purposes of enforcement, the Letrado de la Administración de Justicia will decide, by procedural order, to approach the financial institutions, public bodies and registers and the natural and legal persons indicated by the creditor, so that they provide the list of the debtor's assets or rights of which they are aware. In making such indications, the creditor must briefly state the reasons why it considers that the institution, body, register or person concerned holds information about the debtor's assets. Where the creditor so requests and at its own expense, its procurador may take part in processing the requests issued for that purpose and receive the responses, without prejudice to the provisions of paragraph 1 of the following article.

The Letrado de la Administración de Justicia will not request data from bodies and registers where the creditor could obtain it itself, or through its procurador, duly authorised for that purpose by its principal.

Attachment of assets follows a set of rules. Thus, unless creditor and debtor have agreed otherwise, whether within or outside the enforcement, the Letrado de la Administración de Justicia responsible for the enforcement will attach the debtor's assets while seeking to take into account how readily they can be realised and how least burdensome that is for the debtor.

If, owing to the circumstances of the enforcement, applying the above criteria proves impossible or very difficult, the assets will be attached in the following order:

1. Cash or current accounts of any kind.

2. Credits and rights realisable immediately or in the short term, and securities or other financial instruments admitted to trading on an official secondary securities market.

3. Jewellery and works of art.

4. Money income, whatever its source and the reason it accrues.

5. Interest, income and returns of every kind.

6. Movable assets or livestock, shares, securities not admitted to official listing, and company holdings.

7. Real estate.

8. Salaries, wages, pensions and income from self-employed professional and commercial activities.

9. Credits, rights and securities realisable in the medium and long term.

Attachment of businesses may also be ordered where, taking all circumstances into account, it is preferable to attaching their individual assets.

The following may under no circumstances be attached:

1. Assets that have been declared inalienable.

2. Ancillary rights that are not alienable independently of the principal right.

3. Assets which, on their own, have no economic value.

4. Assets expressly declared exempt from attachment by a legal provision.

The following are also exempt from attachment:

1. Household furniture and effects, as well as the clothing of the debtor and their family, to the extent that it cannot be regarded as superfluous. In general, assets such as food, fuel and others which, in the court's judgment, are essential for the debtor and their dependants to meet their subsistence needs with reasonable dignity.

2. The books and instruments needed to carry on the profession, art or trade in which the debtor engages, where their value is out of proportion to the amount of the debt claimed.

3. Sacred assets and those devoted to the worship of legally registered religions.

4. Sums expressly declared exempt from attachment by law.

5. Assets and sums declared exempt from attachment by treaties ratified by Spain.

And likewise exempt from attachment is:

1. Any salary, wage, pension, remuneration or equivalent that does not exceed the amount set for the salario mínimo interprofesional (SMI, the Spanish statutory minimum wage).

2. Salaries, wages, earnings, remuneration or pensions above the salario mínimo interprofesional will be attached according to this scale:

1. For the first additional band, up to an amount equal to twice the salario mínimo interprofesional, 30 per cent.

2. For the additional band up to an amount equal to a third salario mínimo interprofesional, 50 per cent.

3. For the additional band up to an amount equal to a fourth salario mínimo interprofesional, 60 per cent.

4. For the additional band up to an amount equal to a fifth salario mínimo interprofesional, 75 per cent.

5. For any amount exceeding the previous band, 90 per cent.

If the debtor receives more than one such payment, all of them will be aggregated so that the exempt portion is deducted only once. Likewise, the salaries, wages and pensions, remuneration or equivalents of spouses are aggregated where the property regime governing them is not that of separation of assets and income of every kind, a circumstance they will have to establish before the Letrado de la Administración de Justicia.

Having regard to the debtor's family responsibilities, the Letrado de la Administración de Justicia may apply a reduction of between 10 and 15 per cent to the percentages set out in points 1, 2, 3 and 4 of paragraph 2 of this article.

That said, the foregoing does not apply where enforcement is pursued on a judgment ordering the payment of maintenance, in all cases where the obligation to provide it arises directly from the law, including the rulings of judgments given in nullity, separation or divorce proceedings concerning maintenance owed to a spouse or to children, or of the decrees or public deeds formalising the settlement agreement establishing it. In those cases, as in those of the corresponding interim measures, the court will set the amount that may be attached.

• Assert your collection rights and those of your clients with the Registro de Impagados Judiciales (Register of Judicial Unpaid Debts), list debtors in the RIJ defaulters file and optimise your collection management.
• Publication of debts taken to court
• Search the RIJ free of charge for debts of individuals, self-employed professionals, companies and any other entity without legal personality,  in order to prevent non-payment, reduce risk and make sound decisions.

Before starting court proceedings, the following will be required:

1. An OWNERS' MEETING resolving to approve by majority the settlement of the debt owed to the association by the defaulting owner, and the bringing of legal action against them.
2. NOTICE of that resolution to the owner concerned by written notification stating the date and the reasons for proceeding in this way, signed by the association's secretary with the chair's approval. This notice will be given:
   1. at the address specifically indicated by the party concerned for notices and summonses; and
   2. failing that, at the debtor's flat or premises belonging to the association;
   3. as a last resort, notice will be given by posting the settlement on the association's noticeboard for three calendar days. 

Once these steps have been taken, the monitorio proceeds as set out in this article.

Download here from the BOE the template monitorio claim for recovering the debt of a defaulting member of an owners' association.

Before the Spanish employment courts it is necessary to claim sums owed by the company, or even by the employee where there is a post-contractual non-compete agreement. The most common situation is therefore claiming unpaid wages.

Our lawyers and graduados sociales specialise in ordinary proceedings claiming sums through the employment courts. Once judgment has been obtained, enforcement must be sought until an insolvency order is issued if no assets are found. It is at that point that FOGASA, the Spanish Wage Guarantee Fund, can be approached to ask the State to pay part of what is owed, within the limits set by law.

 See our employment law services

We examine the director's liability for non-payment of the debt, assessing whether the unpaid debt can be claimed from the person responsible for the company.

We support and advise you, file the application for compulsory insolvency and/or safeguard the classification and correct payment of the debts or unpaid amounts during the insolvency stage. 

 All insolvency information

Compulsory insolvency is that applied for by a creditor, before the debtor does so themselves (voluntary insolvency), requesting that the debtor be declared insolvent. A creditor who applies for compulsory insolvency has certain advantages:

• It holds a priority right of payment over a significant percentage of its claim. In other words, if there are assets to distribute, it will recover more than the other ordinary creditors, because up to 50% of its claim will be classified as a claim with general priority.
• The insolvency administrator will take over the running of the business, because the powers of the debtor's directors are suspended.
• There is a presumption that the debtor's directors are at fault, which could mean they become liable out of their personal assets if the insolvency is declared culpable and the company's assets are insufficient to satisfy the claim.

Contact our insolvency specialists