Strategy implies choice, and in debt recovery, the choices that matter most are the ones you make before the debt goes bad. The best recovery strategy is prevention. The second best is early professional intervention. Everything after that is damage control — still worth doing, but more expensive and less certain than the first two options.
Prevention Strategies
Credit assessment before extending terms. For Spanish clients, check the Registro Mercantil (commercial registry) for filed accounts, ASNEF and RAI debtor registries for defaults, and obtain a commercial credit report from Informa D&B, Axesor, or CESCE. Cost: €20–€100 per report. This investment is negligible relative to the cost of a bad debt. Credit management details here.
Contract terms that protect you. Written payment terms referencing Ley 15/2010, retention of title clauses (reserva de dominio), milestone payment structures for large contracts, and Spanish jurisdiction clauses. These aren't just legal formalities — they're the foundation of every enforcement action you might need later.
Payment monitoring. Track payment patterns and flag deviations early. A client who paid in 40 days and is now taking 70 is showing stress. Two consecutive missed deadlines warrant a proactive conversation. Three warrant professional assessment.
Early Intervention Strategies (0–60 Days Overdue)
Structured internal escalation. Payment reminder at day 7. Phone call at day 14. Formal written demand at day 30. Senior management escalation at day 45. If these steps don't produce payment or a credible commitment, professional referral at day 60. The internal process should be documented because this documentation supports later legal proceedings if needed.
Debtor engagement assessment. A debtor who communicates, acknowledges the debt, and discusses payment terms is fundamentally different from one who goes silent. The first requires patience and structure. The second requires professional intervention — silence after 30 days is a signal, not a delay.
Professional Collection Strategies (60+ Days Overdue)
Engage a Spain-based agency. For debts owed by Spanish companies, the agency must have physical presence in Spain, Spanish-speaking staff, and the ability to file in Spanish courts. Local presence is the single highest-impact factor in international debt recovery. Everything else is secondary.
Amicable collection with escalation triggers. The agency follows a structured process: initial debtor contact within 48–72 hours, escalating pressure through multiple channels (phone, formal demands, field visits), and clear decision points for legal escalation. The process should produce either recovery or a diagnosis within 30–60 days.
Pre-legal attorney demand. A formal demand from a Spanish attorney, referencing specific legal provisions and court procedures. This step resolves a meaningful proportion of debts that resist amicable collection, at a cost of €300–€800. The return on investment can be exceptional.
Legal Strategies (90+ Days Overdue, Amicable Exhausted)
Monitorio payment order. Spain's fast-track procedure for documented commercial debts. Produces enforceable judgments in 30–45 days for uncontested claims. The monitorio is the workhorse of Spanish commercial debt litigation and is economically viable for debts above €15,000–€20,000 with strong documentation.
Precautionary measures. If there's a risk the debtor will dissipate assets before judgment, embargo preventivo (precautionary asset seizure) can be requested through the courts. Requires legal expertise and a demonstrable risk, but prevents the debtor from moving assets beyond your reach during proceedings.
Settlement during proceedings. Many cases settle after filing but before judgment. The filing itself creates pressure that produces a settlement offer. Whether to accept depends on the offer amount relative to the likely recovery through full litigation, minus costs and time.
FAQ
What's the single most effective strategy?
Early professional referral. Every month of delay past day 60 reduces your recovery probability by 3–5 percentage points. The cost of engaging an agency on no-win, no-fee terms is zero upfront. The cost of waiting is measured in lost recovery probability. The math consistently favours action over patience.
Should I try to negotiate directly before engaging a professional?
For the first 30–60 days, yes. Your direct relationship with the client may produce results that a third party couldn't. Beyond 60 days, if your direct efforts haven't worked, they're unlikely to start working. The debtor has calculated that your pressure isn't sufficient to compel payment. Changing that calculation requires professional capability in their jurisdiction.
lnterStation BPO
The Most Combative Debt Collection Agency. Collecting worldwide early, disputed and undisputed cross-border accounts since 1998. If you need assistance dealing with past-due accounts in as quick and efficient a manner as possible, we can provide the solutions to meet your needs.
