The Commercial Debt Recovery Process: From First Default to Final Payment

The commercial debt recovery process is sequential, structured, and designed to resolve the debt at the earliest (and cheapest) possible stage. Each step creates the foundation for the next. Skipping steps rarely saves time and usually increases cost.

Here's the complete process for recovering commercial debts from Spanish companies, from the moment an invoice goes unpaid to the moment the money reaches your account.

Stage 1: Internal Collection (Days 0–60)

Before professional involvement, your internal team runs a structured escalation:

Days 1–7: Payment reminder confirming the overdue amount, invoice number, and agreed terms. Professional, not aggressive. Many late payments are administrative — a prompt reminder resolves them.

Days 7–30: Follow-up calls and emails to the debtor's accounts payable. Document every contact: who you spoke to, what was discussed, what was committed. If the debtor raises a dispute, get the specific details in writing.

Days 30–45: Formal written demand via email and registered post. Reference the contract terms, specific invoices, and consequences of continued non-payment. This creates the documented trail that supports legal proceedings.

Days 45–60: Senior management escalation and final internal demand with explicit notice that professional collection will be engaged.

If this process produces payment or a documented, credible payment plan, the matter is resolved. If it produces silence, vague promises, or tactical disputes, proceed to Stage 2.

Stage 2: Professional Amicable Collection (Days 60–90)

Engage a Spain-based collection agency. The process:

Case assessment (days 1–3). Documentation review, debtor solvency check through Registro Mercantil, ASNEF, and RAI registries, recoverability assessment. Honest agencies decline cases they don't expect to recover.

First contact (days 3–7). Phone call and formal written demand in Spanish, from Spain. Establishes professional case management and sets a clear payment deadline.

Escalating pressure (days 7–60). Multiple contact channels: phone, formal burofax demands, field visits to the debtor's premises. The agent applies structured, escalating pressure while documenting every interaction.

Negotiation and settlement. If the debtor engages, the agent negotiates payment terms: full immediate payment, structured payment plan with specific dates and default clauses, or partial settlement. The goal is maximising recovery while maintaining realistic expectations.

This phase operates on no-win, no-fee terms (5–15% commission). It resolves 70–85% of commercially viable debts referred within 90 days of default.

Stage 3: Pre-Legal Escalation (Days 75–90)

A formal demand from a Spanish attorney, sent via burofax, referencing specific provisions of Ley 15/2010, accrued statutory interest, and the court procedure that will be initiated if payment isn't made within a stated deadline (typically 10–15 days).

Cost: €300–€800. This step resolves a significant additional proportion of debts because it communicates legal commitment. The attorney's letterhead, combined with specific legal references and a named court procedure, signals that the creditor has moved from collection to enforcement preparation.

Stage 4: Legal Proceedings (Days 90–180+)

For debts that survive amicable collection and attorney demands:

Monitorio payment order. For documented, undisputed debts. Filed with the Juzgado in the debtor's jurisdiction. Court issues a payment order; debtor must pay within 20 days or file a formal objection. Uncontested claims produce enforceable judgments in 30–45 days. Cost: €1,000–€5,000. Full monitorio details here.

Full civil proceedings. For contested claims. Juicio ordinario (above €6,000) or juicio verbal (below €6,000). Written pleadings, evidence exchange, hearings, judgment. Timeline: 6–18 months. Cost: €3,000–€15,000.

Stage 5: Enforcement (Post-Judgment)

A judgment without enforcement is expensive paperwork. Spanish enforcement mechanisms:

Bank account garnishment (embargo de cuentas). Physical asset seizure (embargo de bienes muebles). Receivables seizure (embargo de créditos). Property charges (anotación preventiva). Each mechanism requires identifying the debtor's assets — which is where your agency's local investigative capability earns its value.

FAQ

How long does the entire process take?

Best case (amicable resolution): 30–90 days. Typical case (amicable + attorney demand): 60–120 days. Complex case (full litigation + enforcement): 8–24 months. The majority of commercially viable debts resolve in Stages 2–3, which is why early professional engagement produces the best outcomes and shortest timelines.

Can I start at Stage 4 (legal proceedings) directly?

Legally, yes. Strategically, rarely advisable. Courts look more favourably on creditors who demonstrate good-faith collection attempts. More importantly, the amicable phase resolves the majority of cases at lower cost and faster timelines. Bypassing it means paying legal fees for cases that could have been resolved for a 10% commission.